IPTV Mag box questions

Hi everyone and thanks for reading.
So I cancelled my sky subscription because we mainly use Netflix but recently knocked into a friends house and saw that they had a small tiny box I think it was a mag254 box.

They had every channel available and stream media from there own network etc. I know people sell these boxes already configured but I have a couple of questions.

(1) how is this done? There is company's selling these boxes. Do you pay a subscription fee?

(2) How reliable are these?

(3) is thus legal? How can someone sell a box that has every channel when sky or virgin charge.

Are they using a paid IPTV service and configuring it on all the boxes they sell using one account?

I see the boxes can be bought online so I'm guessing these would be must be blank box that I would need to configure.?

Any help appreciated.