Raksha bandhan means "bond of protection".
Raksha Bandhan festival falls on the full moon day (Shravan Poornima) of the Shravan month of the Hindu calendar. This is an ancient tradition. Bhavishya Purana refers to a battle between gods and demons, and Indra (the king of the gods) was feeling depressed. At that time Indra's wife Sachi took a thread, charged it with sacred verses or Mantras for protection and tied it on Indra's hand. Through the strength of this thread Indra conquered his enemies. Since then till today this festival is celebrated.
The word Raksha means protection, whilst Bandhan is the verb to tie. On Raksha Bandhan, a sister ties a rakhi (sacred thread) on her brother's wrist with a prayer for his prosperity and happiness. This symbolizes the sister's love. The brother gives her a token gift and a promise to protect her. Brothers take an oath to protect their sisters and sisters pray to God for safety and well being of their brothers.
Happy Raksha Bandhan to all! :)