FVM is based on conservation principles: The same amount of fluid that pours in a volume from one side has to flow out on its other sides with the same physical properties impulses, energy, mass transfer...
Generally, physical values are averaged over a side surface of a discretized volume (e.g. mean value theorem) and allocated to a single point on this surface (e.g. the area centre). At these points information is passed on to neighbouring volumes. Since merely the mean values are passed on at the surfaces, FVM in general tends to be less accurate than FEM. Though, it is advantageous that just adjacent volumes exchange information, which leads to sparse matrices and therefore to lower memory requirements and shorter calculating times.
FVM is the ‘natural’ method in fluid dynamics [History].