These so-called Dumb Terminals contained no processor or storage. They had a keyboard and a printer and the electronics to transmit what was typed to an RS232 interface. If a computer was close enough, the terminal could be directly connected to the computer and lines (a string of characters followed by a carriage/return) read by the computer. The computer would do what was required and respond. The user would react and enter the next line.
If the computer was remote, the terminal could be connected via a private wire with a modem at each end. The modem received the 5 volt RS232 bits and modulated a strong carrier signal to the other modem. The remote modem demodulated the signal to RS232 5 volt bits.
At other times, the terminal was remote from the computer and a private wire could not be afforded.
Then the connection could be a DIAL-UP connection. The dumb terminal was connected to a dial-up modem.
The remote computer would have a group of telephone lines with auto-hunting and modems connected.
The remote user would enter a command to the modem like
This was the beginning of the end of paper-tape and punched cards as input to the computer and the beginning of interactive computing.
Westrex TELETYPE ...
Westrex 770 ...
ITT 3330 ...