The Horizontal Pod Autoscaler watches the CPU usage of pods in a deployment. It compares the current CPU percentage to a target value. If the CPU is higher than the target, it increases the number of pods by one to handle more load. If the CPU is lower than the target, it decreases the number of pods by one to save resources, but never below the minimum set. This process repeats continuously to keep the application running efficiently. The example command sets up autoscaling for a deployment named 'myapp' with a minimum of 2 pods, maximum of 5 pods, and a target CPU usage of 50%. The execution table shows how the pod count changes step-by-step based on CPU usage readings.