Most android smartphones have a GPS receiver. This is for examples why Google Maps can work even without WIFI.
GPS is not the only way to find your location: http://android.stackexchange.com/questions/15009/how-does-google-maps-estimate-my-location-without-gps#
Google has a private database of WIFI IDs, which it correlates to location by crowd-sourcing.
Turn off: Settings > Location. Does not seem possible to turn off just the GPS: Wifi tracking must be turned off as well. But it shows energy usage per app (power hog?), to it's fine.