GCM (Google Cloud Messaging) allows third-party application servers to send lightweight messages to Android applications, eliminating the need for apps to continuously query servers for updates, and works by having an Android app register with the GCM connection server to receive messages sent via the internet from an app server that holds the API key credentials provided by Google. The document then outlines the architectural components involved, including the mobile device, third-party app server, GCM servers, and credentials like sender ID, application ID, registration ID, and sender auth token, before describing the implementation steps for enabling GCM, sending messages from a server, and receiving messages on Android.