How do Alexa Rankings even work?

I don’t really get Alexa traffic rankings. I keep getting more and more visitors to my blog … yet my Alexa ranking keeps plummeting. It’s been nose diving for the past few months now. Not that I’m stat-obsessed with this blog (I totally am) … I just like understanding how and why things are happening. For example, my Google PR went up to a 4, and back down to a zero. I understand why that happened. But I don’t understand this.

And yeah, I’ve gone and read how Alexa rankings are calculated … but it still doesn’t make any sense. Given the steady increase in readership, my Alexa ranking should be getting better. At least, logically speaking it should. What gives?

Also something that bothers me about Alexa, why does my blog information say that this website is based in India? Is it where Google is registered? Since this Blogger and Gmail (the e-mail address that is attached to this website) is owned by Google? I’ve tried to edit the information, but apparently I can’t. I don’t even know how that info got there in the first place.