The AirTag device helps to track objects when it's with them. It could be placed in a backpack, on the collar of a dog, etc. There are multiple good applications for it, but some abusers try to use them for nefarious purposes.
The Pennsylvania woman received the alert on her iPhone, that an AirTag was tracking her location. She notified the police after discovering the device in her vehicle's trailer hitch. In the case of a stalking incident or crime, Apple will provide the relevant information to law enforcement.
AirTag is an effective tracking device because it makes use of Apple's Find My network, in which every iPhone, iPad, and Mac in the vicinity will relay the location of the AirTag.
To limit possible abuses, Apple has introduced features to alert individuals that an unknown AirTag is following them for a long period of time.
The AppleInsider article