The two components are connected in series so that the varying resistance in the sender will affect the position of the needle on the gauge.
Current flows along a single cable from the battery to the component being powered, and back to the battery through the car metal body. The body is connected to the earth terminal of the battery by a thick cable.
This is called a negative earth system, and when buying an electrical accessory a radio, for example check that it is of a type suitable for your car system. Fitting a radio with the incorrect polarity will damage the set, but most car radios have an external switch for setting the polarity to suit that of the car. Switch to the correct setting before fitting.
The electrical system of a car is a closed circuit with an independent power source the battery. It operates on a small fraction of the power of a household circuit.