When you make up a password, the computer turns the number to which it corresponds — call it P — into another number — call it N — according to some rule. The rule should be such that knowing N won’t give away what P is. For example, the rule might say to multiply P by itself a certain number of times and then grab some digits out of the middle of the resulting product. This number and not the password itself is what’s stored in the computer.

When you type your password, the computer doesn’t check the password, just that it gets transformed into N. It doesn’t know your password, so your password can’t be stolen.

That means the administrator can’t know the password either. The only way to get back in is for the administrator to make a new password P for you.