How do WII games work especially dance and boxing

All the games work the same. The Wii remote has accelerometers that can measure motion in any direction and the light sensor at the top of the wii remote is used to tell where you are pointing the controller.

The games use all your movements to affect what you see on the screen. If you want really detailed explanations read the wikipedia.

Wii Remote - Wikipedia, the free encyclopedia (http://en.wikipedia.org/wiki/Wii_Remote#Sensing)