An incremental encoder consists of a rotating disk (or linear scale) with patterns of light and dark areas (or slots) and a sensor that detects these patterns. As the shaft or linear element moves, the disk rotates, and the sensor produces a series of pulses.

**Key components:**
- **Rotating Disk/Scale:** Contains a pattern of markings or slots.
- **Light Source and Photodetectors:** Emit and detect light passing through the pattern.
- **Electronics:** Convert light signals into electrical pulses.

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