The internal working can be explained by dividing it into two blocks, the reference voltage generator and the error amplifier. In the reference voltage generator, a zener diode is being compelled to operate at fixed point (so that zener output voltage is a fixed voltage) by a constant current Source which comes along with an amplifier to generate a constant voltage of 7.15V at the Vref pin of the IC.
As for the error amplifier section,it consists of an error amplifier, a series pass transistor Q1 and a current limiting transistor. The error amplifier can be used to compare the output voltage applied at Inverting input terminal through a feedback to the reference voltage Vref applied at the Non-Inverting input terminal.These connections are not provided internally and so has to be externally provided in accordance with the required output voltage.
The conduction of the transistor Q1 is controlled by the error signal. It is this transistor that controls the output voltage