Wood is made up mostly of cellulose. When it gets hot enough, a process called pyrolysis happens. Just as electrolysis is the process of taking molecules apart with electricity, pyrolysis is the process of taking molecules apart with heat. As heat breaks down cellulose, it produces flammable gases, which burn as flames. It also produces carbon, which burns with glowing combustion. You notice the carbon after a campfire has burned down to coals, which are really the carbon left behind by pyrolysis.

In the process of making charcoal, wood is heated without oxygen. Pyrolysis releases the flammable gases, leaving behind the unburned carbon. That carbon burns as a solid, with glowing combustion. That gives you a nice hot fire, to cook your steak, without the flames which would cause it to burn.