It's just an expert system coupled to some sort of database (possibly Wikipedia). Every time someone plays the game it records their answers. As more and more people play it gets more and more data about each character, and consequently more accurate. I imagine eventually it gives up and asks you who you meant - and adds that character to the database. Given that I picked Brian Cox and it said 7500 people had picked him before, it clearly has a lot of data to work with.
What's more interesting (to me) is why someone created this game. Maybe it's to sell ads, but that database has to be quite valuable as a corpus of information about relatively famous people... You could produce some fascinating network graphs from it.
It's just a kind of "binary search" among different characteristics.
Every answer narrows down the number of the persons. "Man or woman", for example, halfs the available search space. The subject being "French" makes it 100 times smaller (ignore all non-French entries in its database), etc.
Plus, depending of how the coded it, it can learn new people too (it asks you if it can't guess after enough tries). Most people (and it's used by 100s of thousands) ask for the same persons more or less (current stars, politicians, famous authors and painters, musicians, religious figures, comic heroes etc).
And what people consider "obscure" is not always really obscure either.
E.g some might think that, say, Captain Beefheart is obscure. And compared to Justin Bieber he is. But he too is known by hundrends of thousands, so, he's not really difficult to find and store in a database of musicians.
I've had it stumble several times with more obscure people (e.g out of mainstream musicians), and in the end it gave up and asked me their names.
(Btw, the website also has a mobile app available, at least for iOS).
But isnt the hard part building the database ? I'm from South India and it knows about some small time south indian actresses. Either someone manually put it all in or they have a very smart crawler.
I think it's part manual entry and part user generated content. If the site fails to answer your question, you'll be prompted to type in who you thought of, and it'll add them to its database. So it's quite likely someone already thought of your small time actresses and added them in.
It would just have to crawl something like IMDB to get to know all Indian Actresses, their age, if they are still alive, their sex, etc. For more involved stuff, yes, it would need manual assistance to build a db.
But people also asking for the same actress will help it learn, if it doesn't know about her already. E.g at the point it gives up and ask you the name, you have already provided the system with 10-15 answers about the person.
It didn't get Klayton of Celldweller, but it did guess (among others) Brett from Blue Stahli, who is signed to Klayton's record label, so pretty close :)
What's more interesting (to me) is why someone created this game. Maybe it's to sell ads, but that database has to be quite valuable as a corpus of information about relatively famous people... You could produce some fascinating network graphs from it.