The stars have a very predictable pattern to them, ancient people had nothing better to do at night than look up, and since there was no light pollution it was quite a show.
Depending on the time of year, some constellations would be visible all night and move across the sky. That's where the original Zodiac signs came from.
This past winter, I started using Orion as a clock while I was out walking the dogs in the evenings. Got pretty good and could guesstimate the time to within about 30 minutes.
That only works until about 3 am or so, but if I was out more often that late, I could probably just pick a different constellation.
How long do you spend walking your dogs!? Just look at the clock when you go out and won't you still be accurate to within 30 minutes when you get back?
What I meant was that I started noticing Orion's position in the sky at certain relatively fixed times. After a while, I could just look at where it was, relative to the horizon, and determine the current time within about 30 minutes (between about 5:30 PM and 3 AM when it's above the horizon here)
It’s actually easier to tell the time using the stars rather than the sun, because the elevation of the sun is hard to estimate without using a device like a sundial; but there are always stars near enough to the horizon that their elevation can be estimated with the unaided eye.
In theory, yes. In practice, you only have to watch the first night, pick a recognizable star pattern. Follow it across the sky during the night and from then on you can use that first read as your reference. Specific stars, their names or whatever is irrelevant as long as you can find the same group of stars every night. Without light pollution it is trivially easier as far more stars are visible and constellations are obvious.