It uses wifi to exchange messages between phones. Although wifi is often synonymous with internet access, we refer to the radio-based networking technology, often used for internet access. So all smart phones have this ability to exchange data over wifi. Instead of doing so with a router, Tin-Can lets them do it with each other.
Messages are sent from one phone to another in a lump. Your Tin-Can sends me the messages it is carrying, and mine sends you the messages that it is carrying. So imagine you send a message out: You and I cross paths, and it hops to my phone, from mine, it hops to two others, from theirs, maybe 5 more, then 9 more, all the while anyone that that subscribes to mhr will be notified that a message from you arrived.
Hope that helps!