How to install .git file

GCC itself is written in C. Thus, in order to install it, you need a C compiler. This is a catch-22. You're not missing anything. In fact, there is a rather famous Ken Thompson essay, “Reflections on Trusting Trust” reflecting upon a related aspect.

You need to get a C compiler from somewhere. Whoever built your custom distribution surely had one, as you can't build a Linux kernel without it either. They ought to make it available somewhere.

Other than that, you'll have to cross-compile gcc (and binutils, and C library headers, etc.) from a distro where you can install a compiler. This is how someone builds the a distro for a new platform. It's also possible that if your platform is embedded, no one expects you to run gcc on the device itself, and instead they expect you to cross-compile any software you need for the device. In that case, your embedded distro should provide the cross-compiler to use.

1. The Packages.gz contains a Filename field with a value that probably looks something like pool/main/n/name-of-package/name-of-package_version_amd64.deb. This tells the package manager to look at that URL.
   For instance, if you have the following line in your sources.list(.d):
   deb https://some-domain.com/some-url some-distribution main
   You will have the following file: https://some-domain.com/some-url/dists/some-distribution/main/binary-amd64/Packages.gz
   That file will reference pool/main/n/name-of-package/name-of-package_version_amd64.deb, so your package manager will look at https://some-domain.com/some-url/pool/main/n/name-of-package/name-of-package_version_amd64.deb.

2. Sources.gz works the same way, but is optional. It works with apt source, which will fetch you the source if you wish to compile it yourself instead of using the pre-built binaries.
   This is mainly useful for system administrators who want to patch the exact version of the package used by a distribution, rather than contributors/curious people who would just go to the project's homepage and follow the build instructions there.

3. If a package is in the distribution's pool directory but not in Packages.gz, it is most probably in another Package.gz. Notice how you have several words in a typical sources.list line:
   deb http://archive.ubuntu.com/ubuntu precise main universe multiverse
main, universe and multiverse each have their own Packages.gz file. You may need to enable some, as debian for instance disables non-free by default. However, some packages still won't be available (not even in pool). You may choose to add untrusted repositories (such as PPAs on Ubuntu), package the missing program yourself (so you and other people can use their package manager to manage that program) or simply build and install it yourself (you should use the /usr/local prefix to avoid conflicts with your package manager).

4. When a new (version of a) package appears, the Release file for the distribution is updated. This allows apt update to know it has to re-download Packages.gz.