A potentiometer is a manually-adjustable, variable resistor of the type that is commonly used for volume and tone controls in stereo equipment. Potentiometers are variable resistors. They have three terminals with the center terminal being a center tap contact that slides across an element of constant resistance.
A rotary potentiometer can be used to measure the rotation of a shaft. It is easiest to use if the shaft being measured does not need to rotate continuously, but rather would rotate back and forth (as in a sensor "radar dish"). Use of gears is a simple way to lock the rotation of the shaft being measured to the potentiometer. By using a gear ratio other than 1:1, a shaft that needed to rotate more than the 270 degrees or so of the pot could be measured.