Yes, the thermal switch is normally open and closes when temp rises above the set point to call for fan operation.
First off, now that you say it's running with the ignition off, I have to ask when the rad has had a chance to cool and the ignition is off, is it still running? If it eventually goes off then the temp switch is okay and it's now almost certainly the relay, which is indeed a common failure point, end of discussion (hopefully).
Now if it's still on when the engine is cold (and the ignition is off), but disconnecting the switch now turns it off then it's almost certainly a bad temp switch as I noted before. With the ignition off, a good relay being able to be switched on and off by disconnecting a bad switch doesn't make sense as power for the control side of the relay originates through the ignition switch in all designs I'm aware of.
Just FYI here, for the single speed electric fan, I'm noting an additional design from what I mentioned before and what's in the FAQ. It does not change the above story though in regard to the problem at hand. In some of the later 740s and early 940s (and this may only apply to Regina systems), the temp sensor in the rad may be used as the relay control. With some of the earlier 700s (and this may only apply to LH systems as I'm looking at a 1989 740 green manual, the most recent I'm able to find for 700s) the relay control is direct from the ignition switch (with the relay always energized in KP-II) and the rad temp switch sitting between the relay and fan motor to turn it on and off.
From what I can tell, it's when they went to the double speed electric fan that the rad temp switch was done away with and the ECU and an A/C pressostat were put in charge of fan operation.
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Dave -still with 940's, prev 740/240/140/120 You'd think I'd have learned by now
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