A logical shift right moves every bit one place toward the LSB and puts a 0 into the MSB. The old LSB falls off the end.
Why it divides by 2: each bit moves to the position worth half as much, so the whole unsigned value halves. The bit that drops off is the remainder of dividing by 2.
1110(14) →0111(7), remainder 0.0111(7) →0011(3), remainder 1: 7 ÷ 2 = 3 rounded down.
Shifting right k places divides by 2ᵏ and rounds down.
In hardware it is a shift-right register with its serial input tied to 0.
Logical shift right is only correct for unsigned numbers. On a two's complement negative number it shifts a 0 into the sign bit and turns the value positive. For signed values use the arithmetic shift right, which copies the sign bit instead.
Processors usually offer both instructions, often named SRL or LSR (logical) and SRA or ASR (arithmetic). Compilers use them to replace division by powers of 2, which is much cheaper than a divider.