Multi-stage reduction, whether by gears, belts, chain, whatever, multiplies each stage. As in 2, 5, 10 will add up (by multiplication) to 100. 2X5X10... ... In this particular instance, they are using "planetary" gears. Called "epicyclic" by Machinery's Handbook, it is a very compact, high reduction gear train. Two stages of that multiplied together yeild a very large reduction.
Look at "www.hudsontelcom.com", in the projects section, for a piece on Asian 9X20s. That uses a single stage planetary reduction to back-gear the lathe. There are photos, as built from automotive parts. It should answer any question you might have on the subject.
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