A cordless telephone is a wireless telephone that transmits to and receives signals from a base station within a range of a couple hundred feet. In other words, a cordless telephone is basically a combination of telephone and radio transmitter/receiver which has two major parts: base and handset. The base receives the incoming call (as an electrical signal) through the phone line, converts it to an FM radio signal and then broadcasts that signal.
When you talk, the handset broadcasts your voice through a second FM radio signal back to the base. The base receives your voice signal, converts it to an electrical signal and sends that signal through the phone line to the other party. The base and handset operate on a frequency pair that allows you to talk and listen at the same time.
As long as the base unit's antenna can receive transmissions from the handset, the user is free to roam a few hundred feet without being tethered to a coiled wire. However, the handset must be returned periodically to the base unit for recharging, and the base unit must be physically connected to both a telephone line and an electrical outlet.
Many cordless telephones are rendered inoperable during a power outage, unless owners purchase a battery-powered backup device specifically designed to restore temporary service.