Electrostriction and collisional thermalization of absorbed laser energy are the two dominant mechanisms leading to the formation of laser-induced gratings (LIGs) in the gas phase. In this article the results of the theoretical investigations that have been achieved in the past ten years at the Paul Scherrer Institute on this issue are summarized and yield a comprehensive understanding of the underlying physical concepts. Furthermore, a study of the influence of various parameters, such as the alignment and the spatial intensity profile of the beams on the generated electrostrictive and thermal signal is presented for the first time to the authors’ knowledge. The variations of the refractive index responsible for the appearance of laser-induced gratings have been theoretically described by solving the linearized hydrodynamic equations. The contributions from electrostriction, as well as from instantaneous and slow relaxation of the absorbed radiation energy into heat is obtained. These expressions are employed for analysis of experimental data presented in the companion paper  which is devoted to the application of the technique for diagnostic purposes in the gas phase. Much effort has been undertaken in order to allow a straightforward physical interpretation of the experimental findings of the expressions presented here.