The RFID is powered by its own antenna. When in the presence of a pulating magnetic field, the antenna generates a signal that can power up the RFID, causing it to generate its code on top of that field.
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RFID tags can be used to track down almost any item, from automobiles to cell phones. It is basically a tracking device to be used to find out its location.
The type of RFID tag you are referring to is likely a passive device. It gets read by stimulating it with a certain RF frequency and then looks for a unique return. Hence the tag life is essentially forever.
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RFID tags are incredibly easy to purchase. There are many websites and businesses devoted to the increasingly popular RFID technology. A simple search will show you plenty of places that will work with you to create an RFID tag.