What is the young generation?
The Young Generation is where all new objects are allocated and aged. When the young generation fills up, this causes a minor garbage collection. A young generation full of dead objects is collected very quickly. Some survived objects are aged and eventually move to the old generation.
What is the old generation?
The Old Generation is used to store long surviving objects. Typically, a threshold is set for young generation object and when that age is met, the object gets moved to the old generation. Eventually the old generation needs to be collected. This event is called a major garbage collection
What is the permanent generation?
The Permanent generation contains metadata required by the JVM to describe the classes and methods used in the application. The permanent generation is populated by the JVM at runtime based on classes in use by the application.
PermGen has been replaced with Metaspace since Java 8 release.
PermSize & MaxPermSize parameters will be ignored now
How does the three generations interact/relate to each other?
Image source & oracle technetwork tutorial article: http://www.oracle.com/webfolder/technetwork/tutorials/obe/java/gc01/index.html
"The General Garbage Collection Process" in above article explains the interactions between them with many diagrams.
Have a look at summary diagram: