For each keyword you track, rank tracking runs the search a customer would type into Google Maps from every point of a grid laid over your service area. At each point it records whether your business shows up in the top 20 results, and where.
The default area is 13 miles across, covered by 49 points about two miles apart. The smallest setting, 6.5 miles across, puts the points about a mile apart. The widest, 26 miles across, uses 169 points. Every search is a live Google Maps search run through a data provider, with ads left out.
The Reports screen draws the grid as a map, each point colored by position: green for the top three, shading to dark red for 20 and below. Beside it are two numbers, your average ranking and how many points put you in the top three, for your first scan and your latest.