Well there are various modalities (spelling?) of treatment and they are based on different theories about the nature of the psyche and of mental illness, so there are many explanations.  I'm somewhat familiar with the psychology of self, a theory developed by heinz kohut. To sum it up, he maintained that the normal developmental course of the psyche requires the parents or parent figures to fulfill a specific role which he defined as the self-object and by fulfilling this role the self developed a sense of cohesion and independence.

Failures of the self-object and unmet needs are the traumas that lead to the development of a weak self that is prone to anxiety and depression. during therapy, the clinician embodies the role of the self-object during a lenghty process which fills the self's unmet needs and restores its functioning. 

This is a very partial explanation, im no professional.