The core idea of wiggle bones is that some bones are static (they are moved or rotated manuall) and the children bones are dynamic. The dynamic wiggle bones will follow the static bones, and will aim to their original transform relative to the parent.

Here's a really simple case, of one static bone with a 2-level hierarchy of wiggle bones.

Note that one bone can also has several children. Here's an example of a bone with 4 children.