It's typically an estimation based on 85th percentile speed for a given road derived from engineering considerations like grade, curvature, pedestrian access, p

It's typically an estimation based on 85th percentile speed for a given road derived from engineering considerations like grade, curvature, pedestrian access, presence of divider for opposing traffic, and so on. The limit is generally pegged to specific values and modified for certain scenarios (school, construction, playground, etc.) assuming that roads of most types have similar characteristics. While this can vary from region to region for the same type of road, it generally indicates a reasonable estimate of a safe driving speed for the typical driver and typical vehicle. That's how the number on the sign relates.