markerwidth and markerheight give the actual size of the space that the marker is fitted into. The unit is (by default) the stroke-width of the line being marked. How this space is positioned relative to the vertex depends on the position of refx, refy relative to the viewbox origin - see below.
viewbox="minx miny width height" establishes a coordinate grid - the stuff you draw as the marker has its co-ordinates expressed in terms of the viewbox. Eg if box is "0 0 10 10" then you are saying 'Divide the marker space into a grid with width 10, height 10, and let its top left-hand corner have the co-ord 0,0.'
refx,refy establish the co-ords of the vertex in terms of the viewbox. Eg with refx="5" and refy="5", you are saying 'Let the vertex have the co-ords 5,5 in our system', which with the viewbox above would put the vertex in the middle.
(This is all a matter of convention: if the viewbox size, refx and refy, and the dimensions of the marker components are all increased by the same proportion, the result is exactly the same. The idea, I suppose, is that you can use whatever co-ord system you find most useful.)
Btw orient="auto" is not the default. You should specify "auto" if you want something like an arrowhead to point in the same direction that the line does.
