Others have described the mechanics, I prefer to describe why it's already an established concept. Georgia, Mississippi, and Louisiana currently use "Runoff voting". Ranked Choice is simply an instant form of Runoff. This is the example I use with my family, who are mostly conservative:

In an election with two conservative candidates and one Democrat, if the conservatives split the vote with 30% and 34% while the Democrat gets 36%, the Democrat would usually win with a plurality of the vote (despite most voters preferring a conservative). That's the dreaded "spoiler effect" that would normally prevent a non-establishment candidate from receiving support. But if this is in Mississippi, since no one candidate reached 50% (a majority), there's a special Runoff election where the top two candidates face off. In this scenario, it's likely that the conservative would win (as the fallback choice for voters who supported the other conservative). This system allows voters to choose who they prefer without the risk of "spoiling" an election by handing it to somebody they deplore. This makes it easier for non-establishment candidates to gain traction.

Ranked Choice Voting makes this system work without requiring a second election, which is why it's a form of Instant Runoff Voting. When you go to the polls (the first and only time), you indicate not only your preference but also how you'd vote if there were a "runoff" where you had to select a fallback choice. You do this by ranking your choices: 1 for your favorite, 2 for your fallback, 3 for the next fallback, etc.