(1) All happy families resemble one another, but each unhappy family is unhappy in its own way.
It's not very helpful to think of the individual words in isolation. What, for example, is the relationship between each and resemble? In fact, they don't have a direct relationship. They are more closely related to other words in the sentence than they are to each other. We can appreciate some of this structure by dividing the sentence into some of its component parts.
First, we can see that this sentence breaks down into two halves:
|a:||All happy families resemble one another,|
|b:||but each unhappy family is unhappy in its own way.|
And in each of these parts, we can identify smaller units, for example
|a:||[All happy families]||resemble||[one another],|
|b:||but||[each unhappy family]||is unhappy||[in its own way].|
How do we know that these words I have put in brackets are in fact units? In a variety of ways. For example, we can substitute a single pronoun they for "all happy families" or it for "each unhappy family." And "in its own way" could be the answer to the question "how is each unhappy family unhappy?"
These units are constituents in the sentence. A constituent is any word or group of words that functions together as an entity. Most rules of syntax do not, in fact, apply to individual words but to larger constituents. There is no limit, in principle, to the size of a constituent. It may be one or two words, or it may be hundreds of words long.
At its heart, grammatical analysis involves deciding what the constituents are in a sentence. Syntax consists of the rules by which different constituents relate to one another, so constituency is the central issue in grammatical analysis, and in interpreting sentences in general. The most important constituents we'll be working with are phrases, clauses, and sentences.
 This is a very brief and informal analysis, and we have only singled out a few of the constituents in this sentence. In other words, don't think that this analysis is anywhere near complete.