All modern sat nav systems rely on the Global Positioning System known as NAVSTAR to tell them where they are.
NAVSTAR is a system of 24 satellites that orbit the earth at altitudes of around 11,500miles, and which have been organised and paid for by the US military.
Originally NAVSTAR was a top-secret cold war project, designed to guide intercontinental ballistic missiles accurately onto targets in the Warsaw Pact countries, rather than onto a nearby Chinese Embassy. But as the cold war ended the decision was taken to open up NAVSTAR to civilians, the US military stopped encrypting the signals sent by these satellites so that anybody could read them.
Although the early GPS receivers were both bulky and expensive, size and cost have fallen. These days you'll find GPS receivers inside mobile phones, watches and even golfing GPS!
GPS itself works very simply. Presuming you've got somebody to launch and maintain the network of orbiting satellites it relies on, then actually working out where you are is pretty easy.
The secret is one of time. each GPS satellite contains a very accurate clock, which continually broadcasts both its exact time, and also its location -- known as the ephemeris data.
The receiver works out how far it is from the satellite by comparing the message it receives to its own clock and then calculating distance according to how long its taken the signal to arrive travelling at the speed of light. With one satellite, this information is pretty useless, the receiver just knows how far it is from the signal. But with two satellites the distance radii should intersect to give a 'fix', with more satellites increasing the accuracy further. The minimum number of satellites needed for acceptable accuracy is four, but there should be a minimum of 10 above each part of the world at any time. What the system is doing is really just a very long range version of a navigator of old taking fixes from say a church steeple, lighthouse and a hilltop, and drawing some triangles on a map.
How does the receiver know what time it is to the same accuracy as the atomic clocks carried by the satellites?
Rather than having a super-accurate clock on board, the receiver can effectively reverse the equation it uses to plot position to work out what the time is based on the distances from different satellites. Like position, the more satellites it can see, the more accurate its time will be... accurate to about 15 metres for all of us.
Car navigation systems will presume they are travelling on a road, and will move their position to correspond if the reading is slightly out, of course, just because you and your sat nav know where you are, that doesn't mean you have any clue where you're going.
A point made every time another 40-ton truck comes down your road because that's what the sat nav told the driver to do.
It is all very clever but it isn't a substitute for intelligence!