In Traditional Chinese Medicine (TCM), Gan Cao belongs to the 'Tonic herbs for Qi Deficiency' category. Tonic herbs are used for patterns of Deficiency, when one lacks one of the 'Four Treasures' (Qi, Blood, Yin and Yang). Qi tonics are typically sweet and they tend to enter the Spleen and Lungs because these Organs are most involved with the production of Qi.
Furthermore Gan Cao is Neutral in nature. This means that Gan Cao typically doesn't affect the balance in your body. Balance between Yin and Yang is a key health concept in TCM. Eating too many "Hot" (Yang) ingredients can lead to an imbalance whereby one has a Yang Excess. The inverse is true as well: too many "Cold" (Yin) ingredients can lead to a Yin Excess. The Neutral nature of Gan Cao means that you don't have to worry about that!
Gan Cao also tastes Sweet. The so-called 'Five Phases' theory in Chinese Medicine states that the taste of TCM ingredients is a key determinant of their action in the body. Sweet ingredients like Gan Cao tends to slow down acute reactions and detoxify the body. They also have a tonic effect because they replenish Qi and Blood.
The tastes of ingredients in TCM also determine what Organs and Meridians they target. As such Gan Cao is thought to target the Heart, the Lung, the Spleen and the Stomach. In addition to regulating Blood flow, in TCM the Heart is believed to be the store of the 'Mind' which basically refers to someone's vitality. In addition to performing respiration, the Lungs are thought in TCM to be a key part of the production chain for Qi and the Body Fluids that nourish the body. The Spleen assists with digestion, Blood coagulation and Fluids metabolism in the body. The Stomach is responsible for receiving and ripening ingested food and fluids. It is also tasked with descending the digested elements downwards to the Small Intestine.