Scaling is handled in CAD exactly the opposite from the way it is in manual drafting. In manual drafting, you squeeze real-world objects (the building perimeter, footings, 2x4s, and so on) down by a specific scale factor, like 96 or 16, so that they fit nicely on a sheet of paper. Naturally, you always draw text and other annotations the size you want them to appear on the paper (e.g., 1/8" high), regardless of the scale of the drawing.
In AutoCAD, on the other hand, you draw real-world objects at their actual size and stretch annotations up by the scale factor. That means that 1/8" text in a 1/8"=1'-0" plan will be 12" high in the AutoCAD drawing, while the same text in a 3/4"=1'-0" detail drawing will be 2" high. When you plot, everything gets scaled back down to fit on the paper. This approach seems peculiar at first to someone who was schooled in manual drafting, but it's actually more sensible and offers many advantages in CAD drafting. As a result, even so-called "not to scale" drawings should be set up and drawn to a specific scale.
The database approach to CAD that I mentioned in the beginning really comes into play when one starts thinking about how to organize a project's drawings with CAD. Many firms are still stuck in a "sheet-centric" approach to creating drawings, in which the drawing sheet provides the only organizational structure. This approach doesn't exploit CAD's strengths, and in many cases accentuates its weaknesses. A superior approach is to view the project drawings as reports on a graphical database. The database structure should be determined first and foremost by the structure of the graphical subcomponents: the grid system, column layouts that read up through the structure, repeated framing subassemblies, typical and project-specific details, and so forth. The requirements of building size, scale, and structural drafting convention will dictate how the graphical components are assembled and carved up on sheets.
The fundamental idea underlying drawings as databases is that, as in all database management, data should be organized so that repetition is kept to a minimum. AutoCAD offers several relational database-like features, including blocks, external reference files ("xrefs"), and paper space, that can help a well-versed CAD drafter achieve this goal.
Blocks and xrefs are two ways to group objects together into a single subassembly whose definition resides in one place. The advantage of centralizing common subassemblies is that the drafter can change all instances of the subassembly by changing a single definition, rather than having to edit every instance of the subassembly. Paper space is a plot layout tool for showing the same AutoCAD drawing in different ways (e.g., with different areas masked out or different layers visible). It can be useful in structural drafting for plans that require match lines (although xref clipping provides a more straightforward approach). On the other hand, paper space is not appropriate in all situations. In particular, it's an inefficient way to assemble detail sheets or other collections of discrete drawings.