help with oil pressure gauge
 

i just got it in to day. it came with a gauge and a oil pressure sender.
so do i replace the oil sender with the new one i got?
and there is a wire i dont get the is a
12v wire
ground wire
a dimmer wire
and a orange wire that sayes "to oil pressure sender"
and i want to know where does that go is that a ground on the sender? if so how does it read the pressure. and on the other side of the sender it has thread coming out about 1inch long.