I want to download files using Bit-torrent, but I have heard that they can detect when someone is downloading torrents.
How can they detect this? And are there any precautions I can do to prevent their further investigations?
It depends on who "they" are.
If you're torrenting, the university can use commercial traffic inspection tools to identify p2p protocols. The tools are signature based, and the signatures are proprietary, so the exact methods used and methods to circumvent them vary.
If you're torrenting illegally distributed copyrighted content, then the rights holders will be able to participate in the Torrent, identify the IP, date and time of the connection.
If you want to evade the university, you can use a VPN service. This will encrypt the content and evade most modern tools. It is still theoretically possible that the university can detect you though. They can e.g., perform traffic analysis on your VPN connection. E.g., they can tell that you're connected to a VPN service, and that there are gigabytes of data being streamed to and from your systems in torrent-sized chunks. Knowing how universities operate, the onus would be on you to explain what you're doing.
If you opt for the VPN, the VPN provder would be identified by rights holders and might protect you from further investigation. The rights holder could however force the VPN provider to reveal your identity.
To the best of my knowledge, no VPN provder has been forced to reveal the identity of an illegal content torrenter... yet.