Taken from wikipedia-"The phenakistoscope use a spinning disc attached vertically on a handle. Around the center of the disc a series of pictures was drawn corresponding to frames of the animation; around its circumference was a series of radial slits. The user would spin the disc and look through the moving slits at the disc's reflection in a mirror.
The scanning of the slits across the reflected images kept them from simply blurring together, so that the user would see a rapid succession of images with the appearance of a motion picture. A variant of it had two discs, one with slits and one with pictures; this was slightly more unwieldy but needed no mirror. Unlike the zoetrope and its successors, the phenakistoscope could only practically be used by one person at a time.The phenakistoscope was only famous for about two years due to the changing of technology."
This is to do with persistence of vision, in the eye an afterimage is thought to persist for roughly one twenty-fifth of a second on the retina. This is what gives the illusion of fluid motion when still images are flicked through rappidly. However nowadays the shutter speed on video recording equipment is becoming so refined that it is close to trumping the time we take to see thing is reality.
Here is a modern-day Phenakistoscope