GPS stands for Global Positioning System. It is a network of satellites that orbit the earth. Currently, 24 satellites act as a network to provide information on location, speed, time and direction of GPS receivers. The GPS satellite network is maintained by the U.S. Government, and has been in operation and available for public use since the early 1990s. The system can support a constellation of up to 30 satellites in orbit.
Further reading: http://en.wikipedia.org/wiki/Global_Positioning_System
A GPS device collects information from applicable satellites based on its current location and then translates that information into a three-dimensional grid that indicates a particular location on Earth. While GPS is the most popular and accurate system of its kind, Russia uses a similar system GLObal NAvigation Satellite System (GLONASS) and it was in use by only the Russian military, until it was made fully available to civilians in 2007.