In Introduction to smooth manifolds Lee says on page 527:
If $\mathfrak{g}$ is an arbitrary finite-dimensional Lie algebra, any Lie algebra homomorphism $\hat{\theta}:\mathfrak{g}\to\mathfrak{X}(M)$ is called a (right) $\mathfrak{g}$-action on $M$. [$M$ is supposed to be a smooth manifold.]
Basically, I want to understand how fundamental vector fields $\hat{X}\in\mathfrak{X}(M)$, given by $$\hat{X}(p)=\left.\frac{\mathrm{d}}{\mathrm{d}t}p\exp(tX)\right|_{t=0}$$ for $X\in\mathfrak{g}$ and $p\in M$, "describe the infinitesimal behaviour of a smooth Lie group action on a smooth manifold" (source:Wikipedia). While I have managed to understand that the map $X\in\mathfrak{g}\mapsto\hat{X}\in\mathfrak{X}(M)$ is a Lie-Algebra homomorphism, I struggle to understand how it is justified to call a Lie algebra homomorphism an action on $M$.
After a short search I haven't found anything helpful concerning this particular question. My questions seems to be related to that question on the Lie-Palais theorem. Since I am pretty new to Lie theory, I would be glad about a clarification and/or any references on this (particular) subject.