Satellites use an atomic clock (actually 4), for high precision, and continuously transmit their positions, plus a code number in a set code, at exactly the same time. The set code appears to be random, but isn’t, which is why it is known as Pseudo-Random Noise Code. It is the means by which a receiver recognises signals from a particular satellite.
Since the transmission time is known, the distance the signal has travelled can be calculated from its arrival time. The receiver matches each satellite's code with an identical copy in its database. By comparing any shift with its internal clock, it can calculate a pseudo-range, which is similar to comparing a broadcast copy of a song against one already playing on a CD player - if they both started at the same time, the received one would be slightly behind from the time delay. If several “songs” are received at the same time from multiple sources, the GPS receiver can correct for errors in its own clock and determine actual travel times.
The principle used is that, if three perfect measurements can locate a point in space, four imperfect ones can can eliminate clock offsets, or cancel out some timing errors. An error is therefore deliberately introduced, and algebra is used to compute where all possible points could intersect. The result given is your position. Because it is calculated, the word pseudo is used,and the measured distance between a satellite and a receiver is called a Pseudo-Range because the calculated range includes receiver clock error.
Phil