how does twitter show the "followed by" people on pages?

[Chica/]

when you click on a person's page on twitter, under their name, it'll say, "followed by," with some people. where do these people come from? obviously they follow the person who's page you are looking at... but, are they the people you follow? are they the people that follow you? both? idk.

[Dominique]

The people you follow, follow them. It's like Twitter saying, "Hey, these people that you follow, follows this person, so judging by the people you follow, you might like what they tweet."