How does system time work?

root@OpenWrt:/# date
Sat Oct  9 03:18:56 UTC 2021
root@OpenWrt:/# date
Sat Oct  9 03:27:05 UTC 2021

how does the time come from before ntp done?

In the absence of ntp, the timestamp of the newest file under /etc/ is used as approximation for the current time, to keep SSL certificates and similar things (which do require a roughly correct time) working.

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