Definition
There are various definitions for the term "Radio Frequency Identification". The definition below is simple and accurate:

"RFID is an automatic way to collect product, place, time, or transaction data quickly and easily without human intervention or error."
AIM Inc., Association for Automatic Identification and Data Capture Technologies, Pittsburgh, Pa, www.aimglobal.org.

An RFID system comprises a reader, its antenna and transponders (tags, RFID cards) that carry the data. The reader transmits a low-power radio signal through its antenna, which is received by the tag via its own antenna and used to power an integrated circuit (chip). Using the energy it gets from the signal when it enters the radio field, the tag will briefly converse with the reader for verification and exchange data. Once the data is received by the reader, it is then sent to a controlling computer for processing and management.

RFID - How It Works

Illustration by Datamars, 2008

History of RFID
In 1946 Léon Theremin invented an espionage tool for the Soviet Union which retransmitted incident radio waves with audio information. 
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Types of RFID tags
RFID tags come in three general varieties: passive, active or semi-passive (also known as battery-assisted). Passive tags require no internal power source (they are only active when a reader is nearby to power them), whereas semi-passive and active tags require a power source, usually a small battery.
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