Sister ties a "rakhi" on her brother's right wrist, to protect him from evil manipulation and those aspects which may foul his spirit, and to fortify the bond of eternal love between the brother and sister. She goes to her brother and performs the rituals by smearing on kumkum and rice particles on his forehead. In return the brother gives a gift (called "Vir Pasli" in Gujarati), an endowment and pledges to protect and safe-guard her too.
The 'Rakhdi / Rakhi / Rakhadi' itself arrays from a decorated strand to elegantly ornamented balls of various sizes and raw-materials such as fiber, glitters, gold, silver beads, pearls, even pure cotton and so on. After the rituals, the brothers and sisters offer sweets to each other. Sweets symbolize the sweet moments between the brothers and sisters.
On this day, Gurus also ties the rakhdis on their followers and in return the followers offer contributions to them. In several parts of the country it is common to sketch figures on the walls of their abode and worship them with offerings of vermilion and kheer. Overall, it is the emblematic never-ending union between brothers and sisters that fastens ties between them even across continents, which has the most importance on this auspicious day. In many states, they have a day off on this important festival day.
For more information on Rakhi, Rakhi Origins, The History of Raksha bandhan, Raksha Bandhan celebrations in India Visit - http://en.wikipedia.org/wiki/Rakhi