I have heard that there is a command in UNIX called as tr in shell programming of UNIX which translate characters. But how does the translation takes place. Kindly brief me on the output achieved by this command

tr command in UNIX as said by you is used for translating characters from standard input.
The general syntax of this command is:
tr character_from character_to

That is in above character_from and character_to can take one or more single characters. The character_from denotes the input character and whatever is found in this character_from is translated to character_to. The final translated character or output is written to standard output which is the terminal

The above is the general syntax of this tr command but I think there are also many options in this command which I am not aware of. Hope that someone would post those in this discussion.