KMSPico operates by simulating a KMS server on your local machine. When you install and run Kmspico, it interacts with the Microsoft software on your computer, tricking it into thinking it is communicating with a legitimate KMS server. This process involves altering system files and registry entries to bypass the usual activation checks. The software then extends the activation period, making the product appear as if it is fully licensed. This method exploits vulnerabilities in Microsoft’s activation protocols, which is why it can be both effective and risky.