This gorgeous device bears the arms of King Henri II of France, who ruled France from 1547 to 1559, and was used to encrypt secret documents. (You can see it in greater detail on its Wikipedia page.)
I am still trying to figure out how exactly this machine worked. Is it nothing more than a set of glorified decoder rings? Or are there gears inside, perhaps allowing the user to turn all of the small wheels at once by rotating the big wheel?
The right-hand side seems sensible enough--there are (or were) 24 dials, one for each letter of the Latin alphabet (Latin was widely spoken in Europe at the time, and so a reasonable language for the message-senders to have used,) each subdivided into 12 or 24 sections, indicating polyalphabetic encryption.
Polyalphabetic encryption is pretty cool, and was invented in the 1400s, so would have been reasonably current when this device was built.
Your single-alphabet encryption, the sort you probably did as a kid, involves a 1-to-1 correspondence between the letters in your message and the letters in your code. For example, you might switch all of the As to Zs, Bs to Ys, Cs to Xs, and so on. Or all of the As to Cs, Bs to Ds, Cs to Es, and of course, Ys and Zs to As and Bs. Regardless, you can write the whole code on two lines and, unfortunately, it's pretty easy to break. Any letter sitting all by itself is most likely A or I, and you work from there.
With a polyalphabetic code, you change the code for each successive letter in the message you're encrypting. So letter #1 you might switch with its inverse from the other end of the alphabet, as above, but then letter #2 in your message you might switch with the letter two spots to its right in the alphabet, as in the second schema. Letter #3 might be determined in yet another way. As long as the person on the other end knows the key, they can still decrypt the message, but it's much harder for anyone else in between.
Of course, polyalphabetic codes are still breakable, and encryption has come a long way since the 1400s. But for the time, it was pretty good.
So I suspect the 24 dials on the right hand side, with their 12 and 24 spots, would have been used to assist with a polyalphabetic encryption.
But what about the big wheel on the left? It has 18 sections! I have no idea how 18 would figure into all of this. If it were 12 or 24, you could perhaps turn the big wheel to make all of the little wheels turn at once (assuming there are any gears at all inside of this, and that it is not, in fact, hinged like a book in a manner which would completely preclude any communication between the dials on the two sides. Did the maker decide it didn't actually matter how many spots were on the big wheel, so long as it turned? Does it serve some other function? I have no idea. I've been looking around for more information on the subject, but so far I've turned up almost diddlysquat (the best website so far has just been this little one on a wine label inspired by the machine.)
I wish to emphasize that this is just my best guess on how the machine worked, and that I really do not know much of anything at all about encryption. I would be delighted if anyone could enlighten me, especially about that left-hand dial!