A single phase transformer works by electromagnetic induction to transfer electrical energy from one circuit to another without a direct connection. It uses a primary coil and secondary coil wound around an iron core to induce a voltage in the secondary coil from the primary coil's magnetic field. Transformers can be used to step up or step down voltages depending on whether the secondary coil has more or fewer turns than the primary coil. They allow efficient transmission of power over long distances by increasing voltage to reduce current and transmission losses.