What you did is called distillation. Basically, you can separate the different parts of a liquid solution by taking advantage of the differing boiling points of its parts.
Water boils at a lower temperature than caffeine and, likely, most of the other stuff in coffee. By heating the coffee up enough to boil the water but not enough to boil that other stuff, the vapor that condenses will be almost entirely water while the rest of the stuff like caffeine will be left behind.
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