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I assume you're speaking of the older air-cooled engines. They have a bi-metallic cylinder that looks like a tiny, round accordian. It lives underneath the cylinders. When its cold, it is collapsed. In the collapsed state, it restricts the airflow from the cylinders which allows them to get as hot as they should be. When the thermostat gets hot, it expands. This change in length pushes on a lever which allows more airflow around the cylinders, keeping them from getting too hot. Many thermostats have been removed from these, especially on dune buggies. The idea being that the engine can't be too cool. The error in this thinking is the warm up time is increased and a cold engine wears more than an engine at optimum running temp.
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