As AW said.. I started typing a reply on the iphone from hotel room earlier..but it cbacame too much work..
I am not sure exactly if it the correct 'technicla ' description of what happens but as AW says is effectively what happens.
Each 'pulse ' of current down the phase wires creates a rising magnetic field in each coil..this 'pulse ' of magntisim tavels around the hub, from winding to winding .
The magnetic field takes a finite time to build up and decay,
This travellign magnetic pulse puls the magnetic in the rotor aroudn with it.
Each 'pulse' ./..the syncronisation of the pulses in relation to where the magnets are in the rotor, is timed by the output from the hall sensors.
The signal from the hall sensor is sent to the controller, which then sends the power 'pulse ' down the phase wire, creating the magnetic pull. All this takes time. it is not instaneous ...
So as the motor gets faster and faster..the trotor spinnign faster, it reaches a point where the rotor has 'caught up with' the magnetic pulse, so it cant spin any faster.
This is where timing adjustment comes in ( as well as to iron out innaccuracies in buisl as AW allueded to).
Imagine a fixed mark on magnet in the rotor rotating passed the hall sensor. At exactly the point the mark on the magnet, as it passes the Hall sensor, hall sensor fires and tells controller to send pulse down phase wires.
The timing board allows the point at which the controler fires the phase pulse to be adjsuted in relation to the 'timing mark' on the magnet.
So as the motor gets faster, and the magnets in the rotor 'catch up' with the 'magnetic travelling pulse'' the firing point is advanced so the pulse is 'created' earlier
As I said not an exact description, but it is a close enought one to understand what it is doing. Think of timing advance in a petrol engine, as you speed up the engine, the spark is fired earlier to take account the speed of the pistion and the tiem it takes for the fuel to burn.