Wikipedia have full details of the sport (or hobby) here. and part of their page states:
For the traditional geocache, a geocacher will place a waterproof container containing a log book (with pen or pencil) and trade items then record the cache's coordinates. These coordinates, along with other details of the location, are posted on a listing site (see list of some sites below). Other geocachers obtain the coordinates from that listing site and seek out the cache using their GPS handheld receivers. The finding geocachers record their exploits in the logbook and online, but then must return the cache to the same coordinates so that other geocachers may find it. Geocachers are free to take objects (except the logbook, pencil, or stamp) from the cache in exchange for leaving something of similar or higher value.