How is a paper with multiple authors usually written?

I am attending graduate school this fall and one thing that I still could not wrap around my head is that some of the papers are written by seemingly a group of authors (5 people or more). I am curious how this is usually done.

Are each person assigned a small chunk of work and the paper is put together when everyone is done? This raises so many questions such as what if a person doesn't finish his or her part? How do you piece together the paper so that it is coherent throughout (since people may have different perspectives or understanding).

And is there important differences between a paper written by two person and those written by five or more?