Despite the remarkable success of Multimodal Large Language Models (MLLMs) across diverse tasks, the internal mechanisms governing how they encode and ground distinct visual concepts remain poorly understood. To bridge this gap, we propose a causal framework based on activation steering to actively probe and manipulate internal visual representations. Through systematic intervention across four visual concept categories, our results reveal a divergence in concept encoding: entities exhibit distinct localized memorization, whereas abstract concepts are globally distributed across the network. Critically, this divergence uncovers a mechanistic driver of scaling laws: increasing model depth is indispensable for encoding distributed and complex abstract concepts, whereas entity localization remains remarkably invariant to scale. Furthermore, reverse steering uncovers that blocking explicit output triggers a surge in latent activations, exposing a compensatory mechanism between perception and generation. Finally, extending our analysis to visual reasoning, we expose a disconnect between perception and reasoning although MLLMs successfully recognize geometric relations, they treat them merely as static visual features, failing to trigger the procedural execution necessary for abstract problem-solving.