I wanted Buddha to explain it since he is an expert on why it doesn't work!
Honestly, it is pretty complicated and gets overused. A player gets points for:
hitting performance (let's say OPS)
playing time (Think about games played so a players doesn't get too many points for a high OPS in few games played)
fielding (runs saved based on one of the advanced fielding measures like UZR at Fangraphs)
position (extra points for playing a difficult position like shortstop)
baserunning(SB, CS, taking extra bases, etc)
Add it all together and you arrive at the numbers of wins a player is worth compared to a AAAA player playing in his place.
A scrub is 0-1 WAR
Average player 2 WAR
Good player 3-4 WAR
allstar 4-5 WAR
MVP 6+