The gravitational potential energy of a non-viscous liquid increases as a body falls through it because the center of mass of the liquid rises continuously. This phenomenon can be analyzed using a vertical tube of water and a cylindrical plug, where the mass and height of the fluid above and below the plug are considered. By defining variables such as the area of the cylinder, height of the fluid column, and density, one can derive the center of mass as the plug sinks. The discussion includes steps to calculate the mass and height of the fluid cylinders and how to express the center of mass in terms of these variables. Overall, the increase in gravitational potential energy is linked to the continuous rise of the liquid's center of mass as the body descends.