At a very high level, Tor relays encrypted TCP traffic through atleast three intermediatories (relays). It is most effective for anonymity if used along with their Firefox based browser distribution. They do not recommend using Tor as a tunnel/proxy.

Here's a neat illustration by the Tor project of the protocol: https://2019.www.torproject.org/docs/onion-services.html.en

Here a webpage that describes Tor's v2 design in detail: https://2019.www.torproject.org/docs/onion-services.html.en

Here's the v1 (?): https://svn-archive.torproject.org/svn/projects/design-paper...

You can find some of the onion service addresses from here: https://en.wikipedia.org/wiki/List_of_Tor_onion_services

Facebook on Tor kicked off an interesting discussion: https://blog.torproject.org/facebook-hidden-services-and-htt...