Clarification - it doesn't really know if the TV is on or not. What it does know is that it sent the commands to turn the TV on so the TV *should* be on. It keeps track of the power and input state for all of the devices based on what it controls. If you manually change something (turn the TV off e.g.) it will still think it's on, but if that happens you can use the HELP button to resync the remote and fix the configuration.