Modern locks utilize sets spring-loaded brass pins to function.

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As seen in the diagram, the key raises the pin stack to the shear line so that the cylinder plug may turn, activating or deactivating the locking mechanism.

These pins come in different lengths, and can be swapped out to change the key. That’s how they mass manufacture locks that aren’t all on the same key. It’s the same line for lock cylinders, but they use different pins and keys in assembly.

That said, there are only so many combinations of depths a key can have. Most residential keys have 5 cuts, and each cut has around 7 possible depths. So, the combinations aren’t infinite but they are varied enough that a large residential area, all using the same type of lock, shouldn’t have any repeats. And if it does, who’s going around testing their key in every door?

A lock only keeps an honest person out. The point of a lock is to make it too much of a hassle for a potential thief to bother breaking in.