In order to find its position on the Earth's surface, a GPS receiver needs to find its distances from at least four satellites. Theoretically, it needs only three, but the clock on the receiver is not accurate enough to allow this.
Distance is measured by measuring the time taken for the GPS signal to travel from the satellite to the receiver. As the time taken is only 0.06 second for a satellite immediately overhead, an error of one thousandth of a second would give an error of 200 miles! Each satellite has an onboard 'Atomic Clock', which is super accurate, but for each receiver to be similarly equipped, GPS would not be a practical proposition.
Satellites transmit a semi-random signal, which the receiver matches with its own semi-random signal. The distance the receiver has to move its own signal to get a match is a measure of the time difference and a range can then be calculated. It's a bit like matching continually repeated barcodes in reality. This is accurate enough to get a first guess at the distance.
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