After a query has produced an output table (after the select list has been processed) it can optionally be sorted. If sorting is not chosen, the rows will be returned in random order. The actual order in that case will depend on the scan and join plan types and the order on disk, but it must not be relied on. A particular output ordering can only be guaranteed if the sort step is explicitly chosen.
The ORDER BY clause specifies the sort order:
SELECT select_list FROM table_expression ORDER BY column1 [ASC | DESC] [, column2 [ASC | DESC] ...]
column1, etc., refer to select list columns. These can be either the output name of a column (see Section 7.3.2) or the number of a column. Some examples:
SELECT a, b FROM table1 ORDER BY a; SELECT a + b AS sum, c FROM table1 ORDER BY sum; SELECT a, sum(b) FROM table1 GROUP BY a ORDER BY 1;
As an extension to the SQL standard, PostgreSQL also allows ordering by arbitrary expressions:
SELECT a, b FROM table1 ORDER BY a + b;
References to column names in the FROM clause that are renamed in the select list are also allowed:
SELECT a AS b FROM table1 ORDER BY a;
But these extensions do not work in queries involving UNION, INTERSECT, or EXCEPT, and are not portable to other SQL databases.
Each column specification may be followed by an optional ASC or DESC to set the sort direction to ascending or descending. ASC order is the default. Ascending order puts smaller values first, where "smaller" is defined in terms of the < operator. Similarly, descending order is determined with the > operator. 
If more than one sort column is specified, the later entries are used to sort rows that are equal under the order imposed by the earlier sort columns.
Actually, PostgreSQL uses the default B-tree operator class for the column's data type to determine the sort ordering for ASC and DESC. Conventionally, data types will be set up so that the < and > operators correspond to this sort ordering, but a user-defined data type's designer could choose to do something different.