How Does Token Ring Networks Work?

Token ring Network is a local area network. Token ring technology was conceived in the late 1960s. Token ring was actually promoted by IBM. In its physical state, a token ring network is wired as a star, with 'hubs' and arms out to each station and the loop going out-and-back through each. For complete details of Token Ring Network, click here

Token Ring:
In a token ring network (a type of local area network developed by IBM), all computers connect to each other in a ring or star topology and a bit- or token-passing scheme  is used to prevent data collision due two computers simultaneously transferring data.  To prevent data collision, token ring configuration allow uses to take turns at data transmission.  
In popularity, the token ring protocol is the second most widely-used protocol after Ethernet.  
It should also be noted that the token ring configuration can be effectively used with bus topology LANs and will allow up to 255 nodes to connect in "a star topology at 4, 16, or 100 Mbps" using "twisted wire cable" in a "central wiring hub also known as Multistation Access Unit (MAU)"  according to PC Magazine's online encyclopedia (2007).  
It is also important to note that there are 2 types of Token Ring networks.  Using shielded twisted pair wires and IBM style Type 1 connectors, Type 1 Token Ring Networks enable up to 255 stations to function on one network according to PC Magazine's encyclopedia (2007).  In contrast, Type 3 Token Ring uses unshielded twisted pair and provides functionality for up to 72 devices on the network.    An illustrative diagram can be found on the referenced PC Magazine.com website.  
References:

PC Magazine.  Encyclopedia: Term-"Token Ring. Retrieved on March 24, 2008, from, www.pcmag.com
SearchNetworking.com.   Definitions "Token Ring". Retrieved on March 24, 2008 from, searchnetworking.techtarget.com