The Wikipedia article contains many details, does it not?
How they work:
A four terminal circuit element with a set of linear equations describing its behavior. The mathematical properties given by these equations can be simulated by a circuit built out of capacitors, resistors and op amps. In some sense this would be just like an analog computer.
Applications today:
As noted by the Wiki article, active circuits can simulate inductors and other components with apparent inductances much higher than a physical passive inductor could have of the same size. Applications are found in active filter circuits, for example.