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Actuator - Encoder Motor - Dash Switch
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When you actuate the 4wd, it puts the transfer case in the range you selected. It also locks your front hubs to give power to your front wheels. You can feel if the transfer case is engaged as the vehicle may clunk as it engages and you will notice the vehicle is in a lower gear as driving.
The best way to check and see if the hubs are engaged is to turn your wheels all the way and drive forward very slowly. You should be able to feel the vehicle bind and not roll smoothly. If you cannot feel a bind, then your hubs are probably not working. (Be careful driving in 4wd on pavement as the vehicle will not steer the same and is very difficult to turn sharply)