1.How does a Telescope work? 2.What factors increase the magnification of the lens?
It's not quite clear what you mean by "telescope lens" - do you mean the system of lenses that make up a telescope? If so, there are two basic types. The actual lenses in your telescope are probably more complicated and correct for all kinds of aberrations, but they work like this.
The Keplerian telescope (top one in the diagram) consists of two positive lenses, with different focal distances, with their foci at the same point, in between the lenses. Imagine your eye on the left. Two parallel rays will converge to a point at the focus of the right-hand lens, and since this point is also at the focus of the left-hand lens, they will become parallel again, but inverted. Of course you are usually not looking at parallel rays with your telescope, but picturing it this way is what helped me to understand why we see a magnified image.
You might think at first glance from the diagram that this makes the image smaller; but what it does is take parallel rays traveling at different angles to the optical axis, and make them parallel again on the other side of the telescope, but traveling at a larger angle. This increases the apparent size of the object. (Google Docs isn't very good for drawing detailed diagrams - you could take a look at the more complicated ones on the Wikipedia page on telescopes.)
The Galilean telescope (bottom one in the diagram) consists of a negative and a positive lens, again with their foci at the same point. This time the point is on the outside of the telescope, at where your eye is. The positive lens focuses the parallel rays to that point, and the negative lens takes the converging rays and makes them parallel again. This time, the image is not inverted.
Then the second part of your question is about magnification. The focal lengths of the lenses are the only factors that influence the magnification: it is equal to
The minus sign seems counter-intuitive, but think about it - we fill in a negative focal length for the negative lens in the Galilean telescope, so the magnification comes out positive. For the Keplerian telescope, the magnification comes out negative - this indicates that the image is magnified, but also inverted.