The diagram describes the actual wiring of circuit. Lets assume the load you are controlling is a light.

Sr 1940 Wiring Diagram For 3 Way Switch With Light Free Diagram
How does a two way switch work. The red wire is the traveler that carries the current from one switch to another. 2 way switching means having two or more switches in different locations to control one lamp. I believe this is called a three way switching circuit in some countries. In the other switch position it changes over so that com is connected to l2. The electricity flows from the hot wire black through the 2 way switch shown in off position and then to the light and returns through the neutral wire white. Normal switch has two states onoff.
They are wired so that operation of either switch will control the light. By wiring a 2 way switch the circuit below shows the basic concept of electricity flow to the load. A 2 way switching connection means you can control an electrical equipment like bulb by two switches placed at different places generally used in the staircase. Consider sw1 at l1 position sw2 at l1 lamp on sw2 at l2 lamp off. Two way switch has state1state2 single pole double throw ie spdt switch widely used application of two way switch is stair case lighting. Logically it cant be done as both switches would need to be on for the circuit to work power the bulb that is but a two way switch system means that either switch should be able to turn on the bulb.
A two way light switch requires a three way cable three wires plus ground four conductors in all to be run in order for the light to be switched from any station. This means that at any time either switch may be upside down so that its on in the down position or off in the up position. A two way light switch is a simple single pole changeover switch with three terminals. These are typically labelled com l1 and l2 some may label the l1 and l2 positions as 1 way and 2 way. The third wire creates repetitive switching at either end. This video shows how to wire a two way light switching circuit or a two way lighting circuit.
This arrangement is often found in stairways with one switch upstairs and one switch downstairs or in long hallways with a switch at either end. Two way switch can be operated from any of the switch independently means whatever be the position of other switch onoff you can control the light with other switch. This is a completed circuit. In one switch position the com terminal is connected to l1. A two way light switch produces light when two of three wires transport a current to either end of the installation. When i say 2 way swithces i mean a switch with two copper screws.