The functioning of this simple voltage stabilizer circuit may be understood from the following points:
Referring to the figure (Click to Enlarge) we see that Transistor T1 forms the main active part of the entire circuit.
The voltage from smaller transformer is rectified by D1 and filtered by C1 to produce the required operating power for the control circuit comprising of transistor T1, preset P1, zener diode Z1 and the DPDT relay.
The above voltage is also used as the basic reference or the sensing voltage. Because this voltage will vary proportionately with the applied input voltage variations.
For example, if normally the operating DC voltage is around 12 volts, an increase or decrease of the input AC mains voltage by say 25 volts would proportionately increase or decrease the DC volts to 14 or 10 volts respectively.
Preset P1 is set such that the transistor conducts and operates the relay whenever the input AC mains tends to deviate above the exact normal voltage (110 or 225 volts) and vice versa.
If the input voltage crosses the above limit, T1 conducts and activates the relay. The relay contacts connect the relevant connections of the power stabilizer transformer to deduct 25 volts from the input i.e. bring the output to about 205 volts. From here on if the mains voltage keeps on increasing, the ouput to the appliances will be 25 volts below it. It means, even if the voltage reaches as high as 260 V, the output will reach only up to260 - 25 = 235 volts.
Exactly opposite will happen in case the input AC drops below the normal level, i.e. in this case 25 volts will be added to the output, and even if the input keeps on dropping and reaches 180 volts, the output will reach only up to 180 + 25 = 205 volts.
The present design is very simple and basic, therefore the stabilization cannot be very precise. But certainly it will keep the output within 200 and 250 volts against input extreme voltages of 180 to 275 volts (or within 100 and 125 against 90 and 130 volts).