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Some are mechanical and some are electrical. The electrical devices just measure voltage but are calibrated in MPH. The mechanical type generally have a drive cable coming from the transmission which provides a rotational signal that is proportional to the speed of the vehicle. That cable turns a magnet which then tries to turn a "speed cup" inside the speedo. But, there is a spring connected to that speed cup which prevents it from rotating more than one turn. The faster the cable rotation, the more magnetic 'drag' on the speed cup and the higher the needle reading on the speedo. That's all there is to it.
BUT, the speedo is an intricate and somewhat delicate device. Its calibration can be altered with some minor 'adjustments' to the device. So, it must be competely clean (no frictional drag due to contaminants), and the pivots must be clean and free. Also, alteration to the spring on the speed cup will change the readings considerably.
If you have a mechanical speedometer and have problems with it (that are not due to something else in the system--cable, drive gear, etc.), I highly recommend that you send yours out to a qualified rebuilder to repair or purchase an 'exchange' rebuilt speedo to replace your faulty one.
Looks like "7T1's" got it, but have done some work on a few mechanical speedometers in the past, mostly redoing guage faces. Many cars from the 70's speedo's only went to 85 mph, but changed that with my(somewhat limited) graphic art skills and dry transfer lettering kits. Had a local speedo calibration shop redo it for the new face. Said it was a combination of changing the magnet strength, and clock spring. Haven't done this in awhile, and think the speedo shop's long gone, but many here seem to like "speedometerrepairguy.com"