How does the checkerboard calibration work?

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The question is simple to ask, but the anseer is probably not that simple.

I am rather curious as to how OpenCV determines the constants for the camera matrix.

Does it work by detecting the edges of the checkerboard, and then set the x and y axis to align with the edges of the squares? Then when calculating on multiple images from different angles, the fx,fy and cx,cy can be calculated?

But then what about the distortion coefficients? How are they determined?