The system works as a simple battery by using the chlorine in the water to oxidise a metal electrode. The ammount of current it generates (mA) is proportional to the amount of chlorine in the water (more amps, more chlorine). I have used Deplox units maufactured by Wallace and Tiernan. They use a platinum electrode to measure the chlorine with a built in refference electrode to correct the result for changes in pH.
There are a few manufacturerers that produce residual analysers. If you are looking for products Prominent do a cheap alternative to the W & T Deplox. But you need to check the pH prior to purchase as there is a point where the pH correction probes will not accurately correct the measured chlorine and you will require a buffered system that will correct the sample pH prior to measuring the chlorine residual. Severn trent Services or capital control are the only buffered test gear I have used, which works well. As the above postings say you measure a conductive potential across electrodes which relate to a residual but this must be calibrated to the water to be sampled usually with a colour based test unit. The reading is then calculated against the pH and this is where the problems start. Multiplying small number with large correction factors resulting in poor quality reading.