How does deployment on remote servers work?

I'm a bit new to version control and deployment environments and I've come to a halt in my learning about the matter: how do deployment environments work if developers can't work on the same local machine and are forced to always work on a remote server?

How should the deployment environment be set up?

I currently have set it up though whitelisted IP checks on subdomains corresponding to each stage (development.site.com, production.site.com, testing.site.com...) but I have the feeling I am off the track.