The Police Box that the Doctor travels around in is really a Type 40 time and space machine. TARDIS was a name made up by the Doctors granddaughter, Susan. The word TARDIS stands for Time And Relative Dimension in Space.
In the very first story it was established that the TARDIS usually changes its appearance on each trip to blend in with its surroundings. The Doctor later stated that it was the broken chameleon circuit that caused the problem.
The TARDIS is dimensionally transcendental, meaning it’s bigger on the inside than the outside. The interior exists in a different, relative, dimension to the exterior.
In the days before mobile phones and the internet, Police Boxes were one of the few ways people could contact the emergency services. They also allowed Police officers to contact each other.
There were many different designs and styles, during the 1930′s TARDIS like Police Boxes started appearing all over the UK.
By the 1970′s most of the Police Boxes had been decommissioned due to the introduction of two way radio. Only a handful of original Police Boxes still exist today.
Ian ChestertonSo let me get this straight. A thing that looks like a police box, standing in a junkyard – it can move anywhere in time and space?