A "Boiler" is a device that utilizes water as a medium of heat transfer. A boiler can either be a steam or a hot water boiler. Within these two categories of the boilers there are several subcategories of boilers based on the boilers construction design, BTU output, pressure, and use.
A boiler works by transferring hot air by burning natural gases which are, oil, and coal into a mist, which is then use to provide heat, which heats up the water and also helps to sterilize. A boiler works when the fuel is supplied to the burner and heats up to a very high degree, at this time the fire or the gases from it is released to heat up the water.
When it comes to boilers there are two types. These types are the Firetube and the Watertube. The Firetube is the most popular of these models. You can find more information here: http://www.alken-murray.com/Boilerworks.html