The acronym RFID stands for Radio Frequency Identification, which is a technology used for automatic identification and data capture. RFID systems consist of tags, readers, and antennas that communicate wirelessly. Each tag contains a microchip that stores data and an antenna that transmits this information to a reader when activated by radio waves. RFID is commonly utilized in various applications, including inventory management, tracking assets, and supply chain optimization, as it enables real-time data collection and enhances operational efficiency.