I wondering how the drill knows that it is drilling into wood or steel?
Torque is the amount of twist power, dosen't matter what product your drilling into.
Yes it does. Torque can only be measured if two objects make friction together. Steel against steel leads to higher friction than steel against wood because steel is much harder.
The material has no affect on a torque measurement. If you tighten a bolt to 20 Nm in a piece of wood or a piece of steel it is still 20 Nm. The twist applied to achieve the reading is the same.
Maximum torque is a function of the tool not the product being drilled. I agree that the torque (more importantly speed) necessary to drill one material over the other may be different. More torque is used to drive a screw into oak than pine, they're both wood. A screw into aluminum may take less torque than into the oak, metal/wood.
Torque is twist, friction only affects how soon you reach that torque.
There is a higher speed lower torque setting and a lower speed higher torque setting on both of my Festool drills. Slower speeds are required for harder materials, again I believe this is a translation issue. It should read high/low (speed or torque) not wood/steel.
Tom