Remember mood rings?
How did mood rings work?
(For those of you not around when mood rings were big stuff, they supposedly changed color according to the mood of the person wearing it.)
Temperature.
To expand on Padeye’s correct post, they work on temperature exactly like those old thermometers that you could stick on your forhead worked.
More specifically, they are a mix of liquid crystals that change colors at different temperatures.
For how stuff works, I always turn to the ever popular How Stuff Works site.
As has been stated, mood rings are made of a liquid crystaline substance.
A liquid crystal, is a substance that while being fliud, maintains a certain order. Imagine a filled bathtub with toothpicks floating on top. Each toothpick could represent one liquid crystal molecule. Notice how the toothpicks will have a tendency to align in one direction rather than pointing in completely random directions. For example, at the walls of the bathtub, they will tend to float lengthwise with the side of the tub.
Now if you imagine that these toothpicks are floating in three dimensional space instead of just the 2 dimensional surface of the water, you are picturing a nematic liquid crystal. The direction, which the molecules point is called the director axis.
Now try to picture that the director axis twists along an axis perpendicular to the dirtector axis. After some distance the molecules will have made a complete turn and they will be facing the same direction they were at the start. The amount of twist in these is usually temperature dependent. And the wavelength of light which gets reflected, is dependent on the degree of twist.
I apologize if this was too difficult to visuallize, I do a lot better with slides.