How do Character Controllers work?

I’ve always wondered how a character controller even functions, how isGrounded works, how they managed to do it.

As Unity has not made its Character Controller open source there is no specific information as to how it actually work. You might find bits and pieces here and there and many of the assumptions as to how it might be working.

But if you just really need to know how a character controller should work then there are tons of tutorials around the internet.