Caffeine is a vasonstrictor (narrows vessels) so it clamps down on vessels in head that can cause headpain, ie headache. The opposite of a vasoconstrictor is a vasodilator (opens up vessels) such nitroglycerin which causes headaches. Another famous vasodilator, sildenafil, opens up some other important vessels (and also known to cause headaches)
Because headache is the most promiment caffeine withdrawal symptom, and people who may not be aware that they are experiencing relief of caffeine withdrawal when coffee makes their headache go away may believe that coffee helps with headaches, and thus recommend it to others, not being aware that caffeine only relieves headaches in caffeine dependent individuals and that caffeine is not a general remedy for headaches.
Many headaches caused by your blood vessels expanding and creating pressure in your head. Caffiene make the blood vessels shrink, reduces the headache. Other things that might help, drinking water. But especially if the headache is from caffeine withdrawal, caffeine helps.
Edit: typed headache twice instead of caffiene
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