The Elo system is based on statistical probability: the expected outcome of a game is predicted by the rating difference between the two players. If a player rated 2400 faces a player rated 2000, the higher-rated player is expected to win approximately 90% of the time. Rating points are transferred based on actual results compared to expected results.
FIDE (the World Chess Federation) uses the Elo system for its official ratings. Typical rating ranges are: beginners (under 1000), intermediate club players (1200-1600), strong club players (1600-2000), experts (2000-2200), masters (2200-2400), grandmasters (2500+), and elite grandmasters (2700+). The highest rating ever achieved was Magnus Carlsen's 2882 in 2014.
Online chess platforms use modified versions of the Elo system. Ratings on different platforms are not directly comparable because each platform has its own rating pool and starting point. An 1800 rating on one platform might correspond to a very different skill level than 1800 on another.