Pain, in Chinese medicine, is due to a blockage to the regular flow of Qi. Imagine your body as a series of freeways with the cars travelling along these freeways smoothly. The freeways are the pathways through which Qi flows, called meridians. The cars are the Qi itself. Now, imagine that there is an accident on the freeway and traffic is getting backed up and it's not moving how it's supposed to. The site of the accident is like the site of pain. A bottleneck is created and the cars (or the Qi) can't move through the area correctly, wreaking havoc on traffic, or your body.
In Chinese medicine we use acupuncture and herbs to clear that traffic jam out of the way so that proper flow can be restored to the area. In the case of acute pain, it may only take a few treatments for the proper flow of Qi to continue. In the case of chronic pain it may take longer. Why is this? Well, chronic pain is quite a bit more complex. This type of pain often has one or more underlying issues that need to be addressed in order for the body to be able to keep proper Qi and blood flow to the area. For example, arthritis may have developed from an old injury, or it may be genetic, or it could be that the person has spent their life not eating properly, staying stress-free and exercising. If these issues aren't addressed, then proper flow may be restored temporarily, but will often reduce again because of the health issues that allowed improper flow in the first place.
Needles used in pain management may be placed at the site of pain, but they may also be placed far away from the site, depending on the style of acupuncture that your practitioner uses.
Chinese herbs are often VERY useful in helping speed the process of healing. Depending on the nature of your pain, you may be prescribed herbs to take orally short term to speed the healing of an acute injury, you may be given herbs to place on the painful area, or you may be given an herbal formula to take orally to treat issues underlying your pain symptoms (or some combination of the above!).
The most important thing to know is that the quicker you get treatment for pain, the quicker you'll be relieved of that pain. Pain symptoms that have gone on for years tend to get a larger traffic build-up that just takes longer to clear.