No, it does not work like fixed number of digits. A floating point number is represented as s*1.m*2^e where s is the sign bit, m is the mantissa and e is the exponent. Together there are 32 (single precision) or 64 (double precision) bits to store the sign, mantissa and exponent. This way, an enormous range of numbers is representable, but the gap between the representable numbers becomes larger and larger as number size increases. This is the origin of the inaccuracies.
Representable numbers, I think, you can imagine as the mantissa differing by a single, least significant bit. I’m no expert by a long shot, so please inform yourself by the Wikipedia articles 