This is an AC device which, briefly, is made of a magnetically permeable core and two wrindings. When one applies an AC of a certain voltage to the first coil (potential winding), the magnetic forces arising with AC induce on the second winding and EMF which produces voltage on the ends of the second coil. The way of transforming depends on the ratio of the number of turns in the coils.
references:
Britannica.com
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