This article is based on material authored by members of the news.newusers.questions Moderation Board and nnq-workers mailing list, particularly by Jon Bell (until 2005) and Thor Kottelin (since 2007).
In a nutshell, newsgroups are a means of "public discussion". Newsgroup articles (messages) look like email, but they can be read by millions of people all over the world.
This note describes "how newsgroups work" in the sense of what happens to articles after they are posted. To find out "how newsgroups work" in the sense of how to use your news-reading software, look for documentation for your software, or post a question to an appropriate newsgroup.
Newsgroup articles are distributed via news servers, which contain databases of articles. News servers are operated by Internet service providers (ISPs), schools, and other organisations.
No, there is no central server on Usenet. A newsgroup article propagates from one server to another, starting from the server where it is first posted.
Moderated newsgroups are sort of an exception, in that all articles are first forwarded via email to a moderator for approval. The moderator posts them on his/her news server, and from there they propagate as described below. But different moderators use different news servers.
Ideally, all the article in a newsgroup travel to all news servers that carry the newsgroup. This means that when you post an article, the final result is tens of thousands of copies, all over the world.
More specifically, when you post an article, it goes first to your local news server (operated by e.g. your ISP or school). Your server then sends copies of the article to its "neighbors," that is, to servers with which it has agreed to exchange articles. Those servers in turn send copies to their neighbors. Eventually every server that carries the newsgroup has a copy.
Most servers normally send articles to other servers more or less in the order of arrival. This sequence can get scrambled for various reasons, which is why you often see responses before the original article arrives.
News server administrators make arrangements among themselves about which newsgroups they exchange. The receiving server's admin tells the sending server's admin which newsgroups he/she wants to receive. The sending server's admin then configures his/her server to send only those newsgroups.
There are two methods. Servers usually use both of them, in sequence:
Each news server expires (removes) old articles, usually once a day, to make space for new ones. Most servers do this based on the number of days an article has been on that server. The expiration time varies from one server to another, and can also vary from one newsgroup to another, on the same server. It might be less than a day (such as for groups that carry binary content), or it might be two weeks or more. So, even after an article expires from your own server, it is probably still visible on many other servers.
Note, however, that even though you cannot see an article any more, it may still be present on your server. Most news-reading software keeps track of which articles you've read, and shows them to you only once. This way, you don't have to wade through the same articles over and over and over again. There should be a command or button or something which "shows all" or "shows previously-read" or "unmarks" articles, so that you can see all the articles that have not yet expired from your server.