<colloquial expression>

If the "penny has dropped" it means someone has finally realised the situation they are in after possibly being unaware of it for a long time, depending on the situation.

==> The phrase dates back to the Victorian Era and the popular penny-slot arcades. The penny would often stick halfway down the slot and the user would then have to either wait, or give the machine a thump before the 'penny finally dropped' and they could begin playing.
THOMAS: "You know... The other day with the beavers?"
COLIN: "........."
THOMAS: "We used their dam as a bridge?"
COLIN: "........."
THOMAS: "Ruined their homes?"
COLIN: "OHHHHHHHH, now I get you."
GARY: "Ah, the penny has finally dropped. Stupid fool."
by Stuart Fletcher January 22, 2005