First question , how is it supposed to operate, secondly how can I test it? I beleive that it is staying engaged constantly.

Any help is greatly appreciated !  

there is a tiny coiled spring on the front center of thermostatic fan clutches..   is it bimetalic and unwinds and rewinds do to temp variations in the flow of air coming off the radiator...    when the thermostat opens. hot water flows into the radiator core... hot air flowing over the spring causes it to unwind.. since the outer end is fastened the middle rotates... there is a little lever sticking through the cover... it diverts silicone oil between the disc that is welded to the end of the shaft and the housing...   this causes the fan to spin at almost full speed..  when the air flow in the radiator cools off... the spring unwinds.. and changes the position of the lever... it allows the silicone oil to be diverted away from the disc faces... no oil..   no shear.  almost free to spin..

there is a non thermostatic version that is cheeper..  no spring on the front...  it runs at the same friction/shear level no matter what the temp of the air...

i test fan clutches by observation....   warm up the motor... with the motor at high idle... after several minutes as the stat opens.. the fan should start pulling hard... moving a lot of air...(roaring noise)   then in a minute or so.  it should get quiet. and freewheel...

if the fan freewheels when you shut off the motor..   the motor stops the fan keeps on going for a few seconds this may be a bad fan clutch...

this next thing is something i *** i have been a professional ..(with school training) auto mechanic..  i use a short piece of heater hose on the tip of the fan blade.. then have somebody else start the engine...  if you can hold the fan blade with the tip of the hose...  the fan clutch is bad...  

Another way is to just boil water and while its boiling see how much resistance the fan has then pour the boiled water over the thermatic spring in the centre of the clutch SLOWLY then when the water is gone test the resistance again. If the resistance is the same as before this means that it is not working if you have more resistance than befor it means that it is working but possibly on its way out.