Scroll down and the answer is right there:

> Q: What does "every pixel is simulated" mean?

> A: Basically every pixel in Noita is made of some material. The different materials are simulated. E.g. Water will behave like a liquid, gasses will rise, sand will pile up, rigid bodies will rigid body... In addition to that we run simplified simulations of various chemical reactions, electricity, thermodynamics and so on.