Silica gel is an amorphous form of silicon dioxide, which is synthetically produced in the form of hard
irregular granules (having the appearance of crystals) or hard irregular beads. A microporous structure
of interlocking cavities gives a very high surface area (800 square meters per gram). It is this structure that
makes silica gel a high capacity desiccant. Water molecules adhere to the gels surface because it exhibits
a lower vapour pressure than the surrounding air. When an equilibrium of equal pressure is reached,
no more adsorption occurs. Thus the higher the humidity of the surrounding air, the greater the amount of
water that is adsorbed before equilibrium is reached. It is in these higher humidity conditions (above 50%
Relative Humidity) that stored or in-transit items are susceptible to damage.
The beauty of silica gel is the physical adsorption of water vapour into its internal  pores. There is no
chemical reaction, no by products or side effects. Even when saturated with water vapour, silica gel
still has the appearance of a dry product, its shape unchanged.

Standard white silica gel is referred to as being non-indicating. As it adsorbs moisture it remains
physically unchanged. Non-indicating silica gel is both cheap and effective, available loose
in bulk packs or packed in sachets.
Self-indicating silica gels have a moisture sensitive additive added to the basic silica gel. This indicator
changes colour as moisture is adsorbed thus giving a visual indication as to the activity level of the silica gel.

There are a number of different self-indicating silica gels:
Little packets of silica gel are found in all sorts of products because silica gel is a desiccant -- it adsorbs and holds water vapor. In leather products and foods like pepperoni, the lack of moisture can limit the growth of mold and reduce spoilage. In electronics it prevents condensation, which might damage the electronics. If a bottle of vitamins contained any moisture vapor and were cooled rapidly, the condensing moisture would ruin the pills. You will find little silica gel packets in anything that would be affected by excess moisture or condensation.
Silica gel is nearly harmless, which is why you find it in food products. Silica, or silicon dioxide (SiO2), is the same material found in quartz. The gel form contains millions of tiny pores that can adsorb and hold moisture. Silica gel is essentially porous sand.
Silica gel can adsorb about 40 percent of its weight in moisture and can take the relative humidity in a closed container down to about 40 percent. Once saturated, you can drive the moisture off and reuse silica gel by heating it above 300 degrees F (150 C).