How does Audi's quattro system work?

I've heard about Audi's famous quattro all-wheel drive system, but I don't understand how it actually works. Can someone explain it to me in simple terms?

Audi's quattro system is a permanent all-wheel drive system that uses sensors to detect slip and distribute power to the wheels with the most traction. This means better handling and cornering, especially in slippery conditions.

Think of it like a power distribution system for your car. Audi's quattro system constantly monitors and adjusts power to all four wheels, creating better balance and control.