GPS uses satellites to determine the location of receivers on Earth. It works by triangulating the user's position based on signals from at least 3 satellites. Accuracy is typically within 10-20 meters but can be improved to the centimeter level with additional equipment. GPS accuracy can be enhanced through systems like WAAS and DGPS which use additional satellites and ground stations to correct for errors in the GPS signals. Factors like obstructions, weather, and receiver quality can introduce errors of around 10 meters in the calculated position.