How does decimation work without losing samples? For example, changing the frequency from 32.768Mhz to 2kHz there is a scale down of 16384.
From the algorithms I've seen you have to discard 16384-1 samples and only count the 16384th sample. However, that many samples being lost will lose important parts of the information.
How does decimation work then?
EDIT
A signal is sampled at 2kHz and then modulated with a carrier wave of signal frequency 8.192MHz which is sampled at 32.768MHz. I am trying to revert it back to 2kHz, by decimation. I assume pass it through a LPF and  apply decimation however, the points sampled at 32.768MHz are then lost?
Your understanding is correct. You need to make sure the information content fits into the output rate, and that implies your signal needs to be band-limited to 1/16384. Otherwise you'll lose information.
Making sure that's the case with a filter is called anti-alias filtering.