Bryan defined hypnosis as a normal physiological, altered state of consciousness, similar to, but not the same as being awake; similar to but not the same as being asleep, and is produced by the presence of two conditions:

1. A central focus of attention, and
2. Surrounding areas of inhibition.
   

The state of hypnosis thus produces three responses:

1. An increased concentration of the mind: Usually in the wakeful state, our 'units of mind power' are scattered throughout the brain(SJ Van Pelt).
   Any extraneous suggestions during this stage will go scattered throughout and will be captured only by a few mind power units.
   In the hypnotic trance, these units of mind power are concentrated to a point that the suggestions get absorbed and retained easier.
   
2. Increased relaxation of the body: Popular hypnotic induction involves the progressive muscular relaxation techniques, whereby muscle groups are tensed and relaxed gradually to achieve a fully relaxed body and mind.
   
3. Increased susceptibility to suggestion: This is the outcome of the preceding 2 responses, the concentration of mind and the relaxed body.
   The mind, which is in a twilight zone between the wakefulness and sleep, is highly receptive to suggestions during the hypnotic state.
   

To further understand how hypnosis works requires knowledge about the various physiological levels of our mind: the conscious, the subconscious and the unconscious.
In simple terms, these levels represent the state of wakefulness and can be re-classified thus:

1. Alert: Normal state where your mind and body are fully awake and functioning.
   E.
   g.
   you are on the dance floor with your lover.
   
2. Daydreaming: Light trance state.
   Eyes open or closed consciously.
   Body relaxed a bit.
   Breathing is relaxed and slowed, heart beat regular.
   A soothing feeling in mind.
   Withdraws into self with mild awareness of surroundings.
   The direction of attention is towards an imagines activity.
   E.
   g.
   you are idly thinking about dancing with your lover.
   
3. Moderate Trance: Eyes closed, decreasing awareness of surroundings, increased awareness of heart beat and breathing, increased suggestibility and imagery.
   E.
   g.
   you imagine yourself on the dance floor with your lover.
   
4. Deep Trance: Limbs limp.
   Body fully relaxed.
   Attention narrowed.
   High suggestibility.
   Sensory illusions possible.
   Auditory receptiveness and environmental awareness minimum.
   Creative function heightened.
   E.
   g.
   you physically feel yourself gyrating around with your lover!
5. Normal Sleep: Voluntary activities suspended, reduced/absent consciousness.
   E.
   g.
   You dream about dancing with your lover, who may have the face of Angelina Jolie or Aiswarya Rai.
   :-)

The levels 2-4 are the stages of hypnotic trance, where your mind gradually shifts gear from the conscious through subconscious to unconscious level sleep.
It is during these stages that one is highly susceptible to suggestions.
The suggestibility varies from individual to individual.
One person may be highly receptive in light trance whereas another may have to go into deep trance before achieving such a state of suggestibility.
The suggestions given during hypnotic trance are generally positive, with directions that the subject will continue to experience, say, more relaxation and increased self esteem, even after he comes out of the hypnosis.
This is called post hypnotic suggestion.
The post hypnotic suggestions are implanted in the subconscious and with repeated sessions, are bolstered enough to be accepted by the conscious.
Thus hypnosis and hypnotherapy is useful in behavioural modifications to get rid of undesirable character traits.
During the hypnotic trance, it is even possible to induce deeper bodily responses like complete numbness of a body part or healing responses in psychosomatic diseases.