One of the unique characteristics of water is the fact that it refracts light. In fact everything that light passes through refracts, from vegetable oil to a prism, and it is the refraction of light that causes rainbows after a rainstorm and magnifying lenses to work. For our discussion though, refraction simply is what causes fish to see us even when we can't see them.
Have you ever stuck your arm in a clear pool of water and noticed that it looked like your arm was broken at exactly the entry point where arm meets water? You arm enters the water at a specific angle but the angle looks different as the arm continues through the water, this is refraction in action. If your arm enters the water at a ninety degree angle it will still be traveling through the water at a ninety degree angle even though it looks like it may be now traveling at an eighty degree slope.
This difference in how light interacts with the water enables the fish, and other underwater creatures, to observe you at a steeper angle than you are able to observe them. They may be able to even see you from below a undercut bank. This also doesn't take into account specific biological designs of a fish's eyesight. Needless to say, fish have evolved to remain alive!!
By hiding, as much as possible, it mitigates these biological and natural concerns that are all conspiring against you. Hiding behind rocks, bushes, etc all have the outcome of keeping you out of sight from the fish! There are also other things to take into account when discussing this principle, because the whole idea is staying hidden from sight.
Another trick to staying hidden is getting low! This isn't going to necessarily change the angle that the fish are able to see but it changes your height which allows you to get closer to the water. Get down on your knees and fish, it will make a difference in how many fish you catch on a trip.
One more, use the length of your fly rod to your advantage. One of the reasons that a standard fly rod is so long, especially compared to spinning or bait tackle, is the fact that it extends your reach by however long the rod is. The rod enables you stay back and use it's length to direct the line and fly where you want it to go. Think of high sticking concepts, even when you're using dries.
Stay out of sight and you'll catch more fish. As always, Good Luck and Guid Luck!!