Watches come in three general variations: quartz, hand-wind mechanical and automatic mechanical. Smart watches, which are controlled by your phone, are a different animal altogether.
Every timepiece has four requirements:
A power source
A way of transmitting the power
A way of regulating that power
A way of indicating the power so you can tell the time.
For mechanical watches, the power source is the mainspring, which is wound by turning the crown, in a hand-wind mechanical watch, or by moving your wrist in an automatic timepiece. In automatic watches, it is the movement of the hand that turns the rotor, which in turn winds the mainspring. Most automatic movements can be hand wound via the crown as well.
In its simplest terms, a watch is very similar to a wind-up car — you turn the key to give it power, it has gears and the number of teeth in the gears determines how fast it will go across the floor. In a watch, you wind up a mainspring, supplying power to the gears. Instead of going across the floor at speed, a watch applies that power in a different, slower, regulated way, to turn the hands of the watch in perfect timing to the seconds and minutes.
The mainspring’s power is transmitted through a series of gears called the “gear train.” The balance wheel, which is the part of the watch that turns back and forth at a changeable rate, is where the power is regulated. The indication is done by the hands: hours, minutes, seconds and more.
All these things combine to make the watch what it is and determine how well, or how poorly, it keeps time.
A quartz watch is very similar to a mechanical watch, but its power source is a battery and the regulating organ is a quartz crystal.
There you have it, how the three most popular kinds of watches work.