Faraday's law of induction, or mutual induction, is the working principle behind a single phase transformer. Mutual induction describes the process in which a coil of wire magnetically introduces a voltage to other coils nearby. They are called transformers because of the way they transform a type of voltage or current into another.
Transformers are used mostly to convert a higher voltage into a lower, safer voltage that appliances and other electrical devices can use. The voltage is sent across power lines at a higher voltage to limit power loss across the grid. Transformers can either increase or decrease voltage without modifying the current's frequency or the amount of power being transferred between windings via the magnetic circuit.
A single phase transformer consists of two coils of electrical wire called primary and secondary windings, according to Your Electrical Home. The primary is usually known to have the higher amount of voltage. Both coils are wrapped around a common closed magnetic iron circuit which is referred to as the core. The core is made up of several layers of iron, laminated together to decrease losses. Being linked at the common core allows power to be transferred from one coil to the other without an electrical connection. When current passes through the primary coil, a magnetic field is created which induces a voltage in the secondary coil. Usually, the primary coil is where the high voltage comes in and then is transformed to create a magnetic field. The job of the secondary coil is to transform the alternating magnetic field into electric power, supplying the required voltage output.