It does not create a copy. Yes, think of it as a pointer. I you move it, you may be able to relink it. If you delete it, it's gone.
Look for "importing files" in help. It may not answer your specific question, but it provides a lot of useful information.
Thanks Stan... that's what I figured but wanted to be sure.
subsequently move or erase the file, will it still be available for use in Premiere?
No, it will not! Don't delete any files you're still using!
As Jim and Stanley have pointed out, the Project file (.PRPROJ) is basically an XML "database" file. It can be opened in programs, like WordPad, and viewed/edited. It is ONLY the links to the media (in their location, as of the last Save/Save_As/Save_As_a_Copy). They cannot be "played," nor can they function in totality, should the media files become totally unavailable. If you transmit a Project file to a client, or co-worker, you will have to also ship all media files, plus they will have to have a compatible edition of PrPro installed. If these conditions are present, they can then re-link the media files, should the drive letter, the folder, or the folder structure be different. Should the media files be totally unavailable, the Project file is basically useless.
All too often, people will ship these, or very similar from other NLE's, and the recipient will be at a loss as to how they can do anything with that sort of file. The forum is littered with posts on "how do I play a .PRPROJ file," or "how do I play a .PREL (PE's version)?" The answer is, you cannot. You can edit with it, only if you also have access to the media.
PS there are other issues, such as higher versions of .PRPROJ files with earlier versions of Pr.