This description of the mechanism comes straight from "MECCANO GEARS OUTFIT A INSTRUCTIONS" manual.

When a car turns a corner the inner wheels travel only a short distance compared with the outer wheels which have to describe a much greater arc. This means that the inner wheels have to mark time, or turn more slowly, while the outer wheels cover the larger sweep. For the driving wheels, therefore, means must be provided to drive the inner wheel more slowly than the outer wheel, the moment the car begins to turn. The mechanism used for this purpose is known as a diferential, and it is a very interesting one to construct. Many different kinds of differential can be made from Meccano Gears, and two forms can be built from the Gears in this Outfit are shown in Figs. 10 and 11......

Kostas Bozikis (www.bozikis.co.uk)