OK, so here goes a somewhat lengthy explanation. Toyota uses three types of 4WD / AWD systems/configurations. I will start with the one used in the RAV.
1) Full-time on-demand AWD: This is the system used in current generation RAV. "Full-time" means that it is always "ON" and available, "on-demand" means that it only engages where required (or requested by the driver). It does NOT have a central differential. Under normal driving conditions torque is directed 100% to the front wheels. The rear axle is connected to the transmission through a transfer case, propeller shaft and an electronically controlled clutch, which is installed in front of the rear differential. Under specific conditions the clutch will engage to send part of the available engine torque to the rear axle. This occurs under the following circumstances:
a) Hard acceleration from full stop or very low speed - the clutch will engage as soon as you hit the gas pedal to prevent a spin, delivering up to 50% of torque to the rear axle. As the speed increases, the clutch will gradually release sending less torque to the rear, and disengage completely at 25 mph.
b) Front wheel spin - the clutch will engage automatically if the ECU detects that front wheels are turning faster than rear wheels. The system uses ABS speed sensors to measure the speed of each wheel.
c) Pressing the AWD Lock button - the clutch will engage and stay this way until the vehicle reaches 25 mph. Once above 25 mph it's back to fully automatic operation.
The clutch is designed to limit the amount of torque to the rear axle to 50% of the engine output. If you "push" the system too hard (for example playing too hard on a gravel surface) and the systems senses that too much torque would be send to the rear, the AWD light on your dashboard will start flashing indicating that the clutch is slipping to protect rear differential / axles from damage. The clutch has a temperature sensor that will disable AWD completely if the clutch overheats, and keep it disabled until the temperature has dropped to a reasonable range. This approach allows to have a smaller / lighter rear differential and axles to save weight / cost.
This system will not bind on curves under any circumstances because the clutch will release / reduce pressure as soon as it senses that the steering wheel is off-center (as sensed by the steering wheel position sensor located in the steering column). Other vehicles that use this system are Highlander, Sienna, Venza and Lexus RX. There are slight variations in software hence the system comes under different names (Dynamic Torque Control, Active Torque Control).
2) Part-time 4WD with central transfer case and lock: This system is used, for example, in the Tacoma. The vehicle is essentially rear wheel drive. Front axle can be engaged on-demand by locking the transfer case. Such system should be used off-road / on low-traction surface ONLY. Using it on pavement would result in excessive wear, binding, etc. But it is very strong / robust and each axle is designed to cope with 100% of engine torque, if necessary. It works well in difficult off-road situations such as loose stones / rocks or mud.
3) Full-time 4WD with central differential: This system is used in Land Cruiser, the defunct FJ Cruiser, Lexus GX and premium version of 4Runner. In this system, torque is delivered to both axles at all times through a central differential. Toyota uses Torsen Type III torque-sensing differential. Under normal driving conditions it delivers 70% of the toque to the rear, 30% to the front. If one of the axles starts spinning, the Torsen differential automatically changes the torque bias from 70/30 to anywhere between 50/50 and 90/10. The central differential prevents binding on curves. The central differential can be locked to deliver up to 100% of the torque to one axles. This is, by far, the best 4WD system you can have, but it is more expensive and adds substantial weight to the vehicle as each part of the drivetrain must be designed to withstand 100% of the engine's torque.
The system used in the RAV is an effective traction aid for snow, ice and mild off-roading, but is not designed to compete with "real" 4WD systems like (2) and (3) in off-road or extreme situations. It is a good compromise to provide most of the advantages of AWD/4WD for on-road use, while being 100% "invisible" to the driver (i.e. it's basically fool-proof, and the driver can't screw it up), and reduces the weight and fuel-economy penalties normally associated with other 4WD systems.
Hope this helps.