The Wikipedia article answers it pretty well.
You absolutely do not want two trains on the same segment of the track. So there is one token that represents that segment, and the rule is that only the train that has the token is allowed to go on the track. If everyone follows the rule, it will be impossible for a miscommunication to result in two trains entering.
https://en.m.wikipedia.org/wiki/Token_(railway_signalling)
It’s an old, low tech, pretty much foolproof way to make sure that trains don’t collide on a single track. It is generally used when the tracks ahead go down to having trains going opposite directions sharing one track. The train isn’t allowed to proceed if the engineer doesn’t have the token in their hand.
When they get to the other side of the single track, where there are two tracks again, they return the token to the station attendant on that side.
Here’s an article with more info: https://en.m.wikipedia.org/wiki/Token_(railway_signalling)
The drivers of the trains know what sections of track require a token. And the track will have signs telling the driver to stop if they don’t have a token.
So if a driver reaches a sign that tells them to stop unless they have a token, then they will stop at the sign. And will then have to figure out where they messed up.
If a driver knows they need to drop-off / pick-up a token at a signal box or platform and there is no one there, then they’ll wait at that point and radio/telephone or just get out and find the member of staff.
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