An induction motor works on the principle of electromagnetic induction where a rotating magnetic field in the stator induces current in the rotor. It has two main parts - a stationary stator wound with coils, and a rotating rotor. The most common type of rotor is the squirrel cage rotor, made of aluminum or copper bars in slots to conduct the induced current. Induction motors are widely used in industry due to their simple and rugged construction, low cost, and high reliability.