Consider the state space to be the set of points in the x,y plane, and for each such point the height h is the value of the heuristic function for that state. This height function, h = h(x,y), defines a surface. The initial state corresponds to a point on this surface and the goal is to find a state where the height is 0 (or is a global minimum).
Hill-climbing (should be called Valley-Finding in this context where we are minimizing instead of maximizing a value) moves in the direction of steepest descent since it moves to the successor (i.e., adjacent) node that decreases h the most.
Notice that by considering the state space as a continuous space of points in the x,y plane, if the height surface is continuous (i.e., smooth so that derivatives are well-defined everywhere), then the direction of steepest descent corresponds to the gradient direction = [dh(x,y)/dx, dh(x,y)/dy], and the search is called gradient descent.