How does a operational amplifier work?

An operational amplifier or OP-AMP is a DC-coupled voltage amplifier

with a very high voltage gain. Op-amp is basically a multistage amplifier in
which a number of amplifier stages are interconnected to each other in a
very complicated manner. Its internal circuit consists of many transistors,
FETs and resistors.The term OP-AMP is used to denote an amplifier which
can be configured to perform various operations like amplification,
subtraction, differentiation, addition, integration etc. Example is the very
popular IC 741. The symbol and its actual appearance in the IC form is
show below. The symbol appears as an arrowhead which signifies that the
signal is flowing from output to input.

Input & Output Terminals of an OP-AMPAn op-amp has two input

terminals and one output terminal. The op-amp also has two voltage supply
terminal as seen above. It has a differential input and a single ended
output. The terminal marked as negative (-) is called as an inverting
terminal And the terminal marked as positive (+) is called as a non-
inverting terminal of the operational amplifier. If we connect an input
signal at the inverting terminal (-) of the op-amp than the amplified output
signal is π radians (180°) out of phase with respect to the applied input
signal, whereas if an input is connected to the non-inverting terminal (+)
than the output signal obtained will be in phase i.e. it will have no phase
shift with respect to the input signal.

Power Supply for an OP-AMPAs seen from the circuit symbol above it has
two input power supply terminals +VCC and –VCC. For the operation of an
op-amp a dual polarity DC supply is essential. In the dual polarity supply
the +VCC is connected to the positive supply of one power source
or battery and the –VCC terminal is connected to the negative supply of
another source. However few op-amps can also operate on a single polarity
supply. Note that there is no common ground terminal in the op-amps
hence the ground has to be established externally. Working Principle of Op-
amp
Open Loop OperationAs said above an op-amp has a differential input and
single ended output. So, if two signals are applied one at the inverting and
another at the non-inverting terminal, than an ideal op-amp will amplify
the difference of the two applied input signals applied. The difference of the
two applied input signals is called as differential input voltage. The output
of an op-amp is given by the equation:

Where, V0 is the voltage at the output terminal of the op-

amp. AOL is the open-loop gain for the given op-amp and is
constant (ideally). For the IC 741 it is 2 x 105. V1 is
the voltage at the non-inverting terminal. V2 is the voltage at the
inverting terminal. VD = (V1-V2) is the differential input voltage.
It is clear from the above equation that the output will be non-zero if and
only if the differential input voltage is non-zero, and will be zero if both V_1
and V_2 are equal. Note that this is an ideal condition, practically there are
small imbalances in the op-amp. The open-loop gain of an op-amp is very
high hence, very small applied differential input voltage will be amplified to
a very large value.
Also note that it is true that if we apply a very small differential
input voltageit is amplified to a very large value but this very large value at
the output cannot go beyond the supply voltage of the op-amp. Hence it is
not violating the law of conservation of energy.There is closed LOOP
operation as well.
The integrated op-amp’s offers all the advantages of IC’s such as high
reliability, small size, cheap, less power consumption. They are used in
variety of applications such as Inverting & Non-inverting amplifiers, Unity
gain buffer, Summing amplifier, Differentiator, Integrator, Adder,
Instrumentation amplifier, Wien bridge oscillator, Filters etc

How do I understand the internal workings

of an operational amplifier?
If you are looking to understand op-amp design, you can pick up books on
integrated circuit design like Razavi or Allen-Holberg as somebody
mentioned.

However, there are lots of basic stuff you must understand before going
there -

1) current mirrors and biasing.

2) Basic common source/emitter, common gate/base, common
drain/collector configurations.
3) basic differential pair
4) frequency response, gain and phase margin, compensation techniques.

Also, you must understand what the different specifications mean and the
trade-offs between them. It includes but not limited to-

1) open loop gain

2) bandwidth for a given load
3) output resistance
4) output swing
5) input common mode range
6) power supply rejection
7) common mode rejection
8) slew rate
9) input referred offset and noise
10) static power

More advanced specs include IM3 - specially for audio and power amplifier
amplifications.