  Generative mechanisms which lead to empirically observed structure of
networked systems from diverse fields like biology, technology and social
sciences form a very important part of study of complex networks. The structure
of many networked systems like biological cell, human society and World Wide
Web markedly deviate from that of completely random networks indicating the
presence of underlying processes. Often the main process involved in their
evolution is the addition of links between existing nodes having a common
neighbor. In this context we introduce an important property of the nodes,
which we call mediating capacity, that is generic to many networks. This
capacity decreases rapidly with increase in degree, making hubs weak mediators
of the process. We show that this property of nodes provides an explanation for
the simultaneous occurrence of the observed scale-free structure and
hierarchical modularity in many networked systems. This also explains the high
clustering and small-path length seen in real networks as well as non-zero
degree-correlations. Our study also provides insight into the local process
which ultimately leads to emergence of preferential attachment and hence is
also important in understanding robustness and control of real networks as well
as processes happening on real networks.
