I'm still fairly new to Xcode (compared to my 15+ yrs with Visual Studio), and wondered what exactly happens. What I mean by that is by default you can't see where the Git repository was created and that's because it's hidden. Every time you select 'Create Git repository on 'My Mac'' Xcode creates hidden Git folder in the same folder as your project. To be able to see it (in Mavericks) open terminal window and type:
defaults write com.apple.finder AppleShowAllFiles TRUEHit Enter and type:
killall FinderYou should now be able to see the hidden Git folder inside your project:
defaults write com.apple.finder AppleShowAllFiles FALSEHit Enter and type:
killall FinderThat's all.