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Sometimes we see .htm or .html, the only way to differentiate between these files is their file name extensions. The webpage’s standard file extensions are .htm & .html. While both these extensions are related to HTML, which is a basic language used for writing webpages. These are usually used for webpages with static content. .htm is sometimes used as a short form extension of an HTML file. Concisely, .htm and .html are both recognized as HTML files.
For how does it work, please link here, https://www.tutorialspoint.com/web_developers_guide/web_how_it_works.htm