Distance equals speed of light times time
Range = c x travel time, with c = 299,792,458 meters per second. Light covers about 300 meters in one microsecond, so timing has to be precise to billionths of a second for meter level accuracy.
The receiver actually solves four equations with four unknowns: its three position coordinates and its clock offset. That is why at least four satellites must be in view for a full fix. The ring in the scene is a simplified picture of how a clock error spreads the answer out.
What limits real accuracy
Once the clock is solved, the remaining errors come from the atmosphere slowing the signal, small errors in the broadcast orbits, signals bouncing off nearby objects and satellite geometry. The U.S. government reports civilian horizontal accuracy within about 8 meters 95 percent of the time, as a global average, and farm equipment adds correction signals to reach centimeters.