The power output of your electric cigarette is determined by the voltage of the battery (usually 4.2V when fully charged) and the resistance of your coil (the lower the resistance, the higher the current and therefore more power). They usually are shaped like a tube (tube mod) or like a box (box mod). The circuit in such a mod is closed all mechanically, for example with copper plates that touch each other. Some Chips work with just one battery, while others (especially ones that can output a high power) need a higher voltage and therefor you need to use multiple batteries in series to increase the voltage (more about this topic down below)
There are different kinds of chips, but in most cases you do not have to worry too much about that, since they do all the control on the chip. Often they also have a screen to display the power, battery life and more. They contain a chip with some safety features and furthermore they let you adjust the power by pressing a button or turning a knob.