Governors are very simple devices on Auto transmissions. As BestMech says, it is just one of several inputs the trans needs to do it's job properly. Remove it and the trans can't do anything 'cause it has no information.
They are located on the tail shaft and consist of a couple of spring loaded weights that are connected to a slide valve in the fluid control circuit. It is a 'speedometer' for the trans, i.e. the slide valve is all the way in when the car is not in motion but as the car takes off and gais speed, the weights are thrown out by centrifugal force, overcome the spring tension, and move the slide valve proportional to the speed of the car. Thus the transmission has the information it needs to change the shift points and severity for optimal shifts. People who know their stuff play with the size of the weights and spring tension to get the shifts they want, just like you do with the centrifugal weights and springs in an ignition distributor. The typical hobbiest or racer needn't worry about the governor except be sure the springs aren't broken and the slide valve works freely.
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