A pilot valve in a hydraulic system acts as a pressure-control valve allowing hydraulic fluid to pass through to another valve using either a sliding or a poppet design. If there is too much pressure on hydraulic liquid, the pilot valve will open up and let liquid pass through to diminish the pressure.
Hydraulic systems make use of incompressible liquid in different-sized pistons. The systems allow for force that is exerted on a small piston to be magnified in the large piston. When force is applied to the small piston, Pascal's law states that pressure must be equal throughout the entire liquid, so pressure is built up in the larger piston which creates a magnified force because of the larger area of the chamber.
The hydraulic liquid passes through a series of valves in between the two pistons. The pilot-valve typically has a spring or electronic press on a stopper that will only open up at a certain pressure. If the pressure of the liquid exceeds the allowed pressure on the stopper, the valve will open up and allow liquid to run through it in one direction to equalize the pressure. The entire hydraulic system depends on the pilot valve, if the pilot valve opens too early or too late, then the entire system does not work properly.