Transformers are static electrical devices that transfer energy between circuits through electromagnetic induction, functioning to step up or step down alternating voltages without changing frequency. They consist of three main parts: primary winding, magnetic core, and secondary winding, utilizing the principles of electromagnetism and Faraday's law of electromagnetic induction. Various configurations and designs exist, including core type and shell type transformers, each with distinct winding arrangements and purposes based on voltage requirements and applications.