>>14227512The consensus isn't settled yet but the working theory is that paracetamol acts on the cannabinoid receptors to provide pain relief, which are the same receptors that activate during long(20-30 min+) aerobic exercise and provide a mild high and pain relief in that context. This isn't like blocking the "pain receptive nerves" but rather like earplugs for the brain if pain was noise.
There is also an anti-inflammatory effect from paracetamol that indirectly causes pain relief through reduced inflammatory activity, an effect much less powerful than that from NSAIDs like ibuprofen. How paracetamol acts to reduce inflammation is essentially unknown.
In most cases the inflammatory process is what causes pain in disease, which is why the pain relief from reducing inflammation is greater than reducing the sensation of pain.