It looks like this. You aren't fair off with your idea either, but basically it is a weak radio transmitter which sits in the track and it's capable of talking to a receiver which is mounted on every train. There must be tens of thousands of them on the network, you would be hard pushed not to see one at a reasonably sized station.
It's job is to stop the train in certain circumstances. In laymans terms this will be in one of three situations, ahead of a red signal (where obviously it gets turned off if the signal is displaying a proceed aspect), ahead of buffer stops (these 'grids' tend to be a bit smaller in size than normal ones) and ahead of a permanent speed restriction where the required reduction in speed is fairly significant (this will be two grids a short distance apart working in tandem, the first one starts a timer and the second one will stop the train if it covers that distance too quickly).
There is a receiver in each driving cab so at any location where a train reverses (such as a terminus like Paddington) you always have the possibility that the receiver in the rear cab on arrival will be over the TPWS grid on departure. That can/will cause the TPWS to set up incorrectly and go into temporary isolation mode which is indicated by a bright yellow flashing light in the cab. This can be reset by moving the train away from the grid and then removing and re inserting the key. The process takes between ten seconds and two minutes depending on what type of traction you are driving, on stock fitted with ATP (like Chiltern DMUs) it is very much at the slower end of that time needed.
