Of course we know that the day has twenty-four hours. Ever since the ancient Babylonian astronomers announced that there were twelve hours of daylight and twelve hours of night, we have believed them. (The Babylonians loved twelves.)
But when you think about it, there is no particular physical reason why we should divide up the day the way we do. And for medieval people, there was certainly no reason why hours always had to be the same length.
They, like us, assumed a daily cycle of twenty-four hours--that is, they assumed the sun went around the earth once every twenty-four hours, whereas we know the earth rotates once every twenty-four hours. But close enough.
Where they differed radically was that hours were longer or shorter depending on the season. By definition, for them, there were twelve hours between sunrise and sunset, and twelve more from sunset to sunrise. This meant that in the summer the daylight hours were long and the night hours short, and vice-versa in the winter.
Whereas we count our hours from midnight, they counted theirs from sunrise. So what we would call 7 am at the equinox, one hour after sunrise, was for them the first hour, "prime." Many events were supposed to take place at certain hours, such as the big meal of the day at "none," the ninth hour, in the middle of what we would call the afternoon (on mealtimes, see more here). Because they recognized that hours were longer or shorter at different time of the year, some things were adjusted according to the season.
For example, monks were supposed to get up at certain times during the night for prayers and liturgy. During the winter, they went back to bed in between these "night offices." During the short nights of summer, however, there was no time to do so before the next round of prayer and psalms. Thus, the monks were allowed a nap in the afternoon.
Every church had people who were supposed to keep track of the time and ring the bells (every three hours, not every hour). Without modern clocks, they would keep track through the angle of the sun, the position of the stars, and such things as candles and water clocks (where the water dripped through slowly), though the latter had to be adjusted according to the season. In a cathedral city, the ringing of the cathedral bells was an important event. Some of the other churches in town would wait until the cathedral started ringing and then quickly start ringing as well. Other churches, to show their independence of the bishops, would deliberately ring at different times.
The invention of mechanical clocks in the fourteenth century marked a major change in how people thought about time. Now hours were all the same length, a radical concept. One could plan to meet someone at "terce" (mid-morning) and know, from glancing at a clock, if terce was soon or a while yet, rather than waiting to hear the bells. Clocks were far too big and complicated for personal use (as watches), but a centrally-located one could be readily consulted.
Medieval merchants and artisans thus found clocks very useful for business. The late medieval clock in Auxerre, pictured above, was erected as a symbol of municipal liberties, in opposition to the bishop and the cathedral's version of hours.
Of course, for most of the population, time was reckoned somewhat differently. When you woke up, it was time to work. When you were so hungry you couldn't work anymore, it was time to eat. When you were so exhausted you couldn't work anymore, it was time to go to bed. (This pattern was ameliorated during festival times and when there were few farm chores, as during the winter, but it was still the standard.)