How does Google maps on an iPod Touch work out where you are?

I have an iPod touch and just got the upgrade so it has google maps. There is a locator function that can pinpoint where I am and shows it on the map. Since the Touch uses wireless not cell phone signal, how is it locating me?

it locates you via your router so if your using your neighbors internet it would locate his house instead of yours and so forth. hope that helps you out

Inside it has a GPS tracker

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