Explain how custom Ruby gems isolate dependencies and hook into the RubyGems activation engine.

RubyGems manages load paths ($LOAD_PATH). When a gem is required, RubyGems intercept hooks find the matching version spec and append its file pathways to the application namespace layout.

When a Ruby process initializes, it configures global search vectors inside an array of directories named $LOAD_PATH (or $:). When you run require 'gem_name', Ruby searches these paths sequentially. RubyGems overrides the standard kernel#require method. If a file isn't found on the baseline path, the RubyGems hook scans the installed system specs, finds the target version, activates it by appending the gem's lib/ folder directly onto the global $LOAD_PATH, and then safely loads the target script.