The penny drops means sudden understanding or realisation of something or other. The expression usually implies a period of non-comprehension before the penny drops and derives from early penny slot machines in which the coin or coins took quite some time to drop. That is why the expression is sometimes in the form of ‘the penny has finally dropped’. The OED cites the 1940s as the first appearance of the figurative meaning. Penny slot machines first appeared during the mid-19th century and some alternative sources date the current figurative meaning from at least the 1920s, if not earlier.