Imagine each computer as a paper cup with string attached to each end. People speak through the cup and you can hear the vibrations through the string on the other cup. Instead of speech vibrations, it’s computer data, like the position of the character, and their state(animation/stance/equipped inventory).
The very large under sea cables that go around the world can transfer a huge amounts of this data at an incredibly fast speed. Slower than the speed of light, but fast enough to transfer 20+ terabits per second. For instance, the Infinera Marea cable that goes from the US to Spain can transmit data across in 33 milliseconds, according to them.
Many multiplayer games have a lag compensation feature. The server that players are connected to is taking note each user’s delay and compensating based on what the state of the game was when they committed an action.
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