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They are electrical, and rely on resistances changing as temps change.
It is always a good idea, when trying to diagnose an issue you think you have because of a gauge reading, to verify the gauge is reading accurately. They can be off because of a bad sender, a bad gauge, a bad electrical connection, etc.
I recently had my oil pressure start reading erratically. Ended up being an issue with the sender leaking oil out through the electrical fitting.
The gauges mostly just give a rough idea of what's going on, and if what they are telling you changes, then start looking for issues. Obviously what it's reading for you has changed, so always a good idea to make sure you have an actual issue, and not just a bad gauge, before spending a lot of time and money fixing an issue that might not even exist.
So to reiterate, verify you have an issue, and do that by verifying that the gauge is reading properly by using a laser thermometer or similar device to check engine temp at the metal next to the thermostat and the sensor.