Muscle damage is simply workload, which is the weight you lift multiplied by the reps plus the totals for the other sets. The body adapts to this workload by building more muscle mass, which makes you stronger. It will also innervate the existing muscle mass more effectively depending on the rep range you perform (usually low reps) to increase the number of muscle fibres that you recruit for a rep, which makes you stronger.
If you increase the workload periodically, your body will keep on adapting progressively as the weight increases. This is the only way to build muscle, by progressively overloading your muscles to keep your body adapting. If you aren't getting stronger, generally speaking you won't be getting any bigger, innervation aside.
Unless you consume more calories than your body needs, you will not build muscle because it isn't exactly a priority if you are not eating enough to survive in the long run. The extra calories will turn straight to fat unless you have a workout program that you follow. If you do, then the extra calories are used in the construction of new myofibrils in the muscle fibres and also in the repair of the existing structures, including connective tissues.
Generally, it is said that you need to eat 20 times your bodyweight in lbs to gain muscle, but this will vary from individual to individual based on their bodytype and metabolic rate. An ectomorph will find it hard to gain muscle and fat because their body's nutrient turnover rate is much quicker than a mesomorph for example. How many calories you need to eat is also dependent on your weight (and therefore height) and also your activity level. Protein requirements are also dependent on weight and the amount of training you do. For a beginner lifter, 1.5 gram of protein per lb of lean bodyweight is fine, for an intermediate to experienced lifter roughly 2 grams per lb. In my opinion 2.5 to 3 grams per lb of lean bodymass is unnecessarily high because as long as you have enough carbohydrates in your diet, all the protein will be used for muscle repair and growth. Many will disagree though.
There is a cliché that is often overused, but it is true: "your muscles don't grow in the gym". Therefore give your muscles plenty of rest in between workouts to allow enough time for your body to repair any damage and to increase your muscle mass. This will only happen if you are eating enough calories and getting plenty of rest. It is often said that 72 hours if required for all muscle tissue damage to be repaired, and that it takes longer for connective tissue. As long as your muscles aren't excessively painful to use and your joints feel fresh, you can workout the same muscle after 72 hours. A beginner's routine based around strength progression rather than volume will be ideally suited to this, whereas a professional that has a higher workload will perhaps workout only once per week to avoid over training; hence how often you workout will depend on your experience level and the type of routine you are following.
Sleep is very important, you need at least 7 hours per night on a consistent basis, but 8 is ideal. You cannot catch up on sleep at the weekends. It is also important to go to bed at a reasonable hour, otherwise you wake up feeling more tired than you went to bed because you are disturbing your body clock. You also want to take full advantage of the release of anabolic hormones during the first three or so hours of sleep when you enter a period of REM sleep. Each period lasts three hours and is separated from the next by three hours of less useful sleep.