Heating sugar results in caramelization and is a chemical reaction. A chemical reaction is the process in which one substance is altered and forms a new substance with differing properties.
Exposure to heat initially melts the sugar into a syrup. This is the breakdown of the sugar into fructose and glucose, and it is marked by the aroma it creates. Continued exposure to heat alters the color of the melted sugar to yellow, then brown. The color change is caused by the further breakdown of the sugar molecules and formation of caramelin. The chemical change alters the color of sugar and changes the taste and consistency of the sugar as well.