Tor: What is Tor, and how does it work?

Short answer

Tor is a network that routes a connection through several volunteer relays so a destination website sees a Tor exit relay rather than your home IP address. The relays do not each learn both who you are and where you are going. Tor improves network privacy, but a website can still identify you if you sign in or tell it personal details.

Sources

Tor Project: About Tor Browser.