The "normal" everyday operating mode for a part-time 4WD vehicle like a '92 Explorer is 2WD High (2H). In this mode, power is only sent to the rear wheels.
For low traction situations, you put the transfer case in either 4wd high (4H) or 4wd low (4L). You can't use either 4wd mode on the street. In either 4wd mode, you are sending equal power to the front and rear wheels. Because the front and rear drivelines must spin at the same speed, you will create severe stress in the drivetrain when using either 4wd mode on the street. This stress will eventually break something.
4H is at the same "gear reduction" (that is to say -- none) as 2H. Only difference between 2H and 4H is the fact that the front end is engaged in 4H.
4L offers a significant gear reduction over 2H and 4H. This offers significant torque increase at the wheels, but also a significant reduction in top speed. If you were truly running in 4L on the street, you'd know that something was wrong.
Hope that helps you understand the basics of operating a part time 4wd.
Note that, if the lights on the dash don't work, then there are also lights on the switches to indicate when the truck is in 4H and 4L.