How do electric sanders work? (as in the inside workings etc?)?

The main mechanism of the kind of sanders you mention is called an eccentric cam. Basically eccentric means it rotates with its center of gravity offset from the axis of rotation. Although I can't say I know for sure just how the design of any particular sander goes, I'm pretty confident that what happens is that an eccentric cam attached to a motor rotates inside a cylindrical enclosure which is part of the pad. The cam pushes on one side of the cylindrical enclosure and shifts to other sides as the rotor turns. The pad is prevented from rotating by its mounting so it ends up vibrating in an orbital fashion which maintaining its orientation.