Middle C designation in Bass Clef

[David House]

So, going through the tutorial. I am confused about the ' designating middle C.

This is the coding in the example of page 15 of the tutorial manual which 
places c' in within the bass clef staff:

 \relative {
   \clef bass
   \time 3/4
   \tempo "Andante" 4 = 120
   c,2  e8 c'
   g'2.
   f4 e d 
   c4 c, r
 }

Yet this coding using the c' designation places middle C where it is supposed 
to be, above the bass clef staff - 

 \relative {
 \clef bass
 c'1
 }

Is this because the \relative command means the ' places the note above the 
starting note octave?  Another explanation why middle c would appear any place 
other than above the bass clef staff?

Thanks so much for your guidance.

Best,

David