Pulse Width Modulation
Pulse width modulation is a voltage regulation technique found in many regulated devices. The basic idea of pulse width modulation is for the chip to switch on and off a batteries output very quickly to lower the average voltage over time. If a battery is currently capable of outputting 4V and the desired output voltage is 3V (these are examples, not intended to be representative of real life use) then the chip will pulse with a duty cycle (time spent on) of 75%. This will average out at roughly 3V.
The image below shows an example of pulse width modulation. D=Duty Cycle
Pulse width modulation is not 100% accurate due to many factors, some devices handle this better than others.