In short, a mechanical watch is driven by a tightly wound coil that slowly releases energy as it unwinds. It is this ‘energy’ that is transferred to the hands of the watch that determine the time and other features of the watch like the date or chronograph. Other parts of the watch each play their own role in monitoring the speed, tension and energy stored by the main coil. It’s really quite amazing that even very inexpensive watches that last for years have this fine technology for very little cost.
It is interesting to know that to reduce the friction of the small moving parts, synthetic rubies (or other jewels) are actually added where parts come into contact with each other. Lubrication is also added to provide support for the movement of all its parts.