The chips that are referred to in Alcoholics Anonymous meetings are in fact coin sized medallions that some people like to have as a time marker of their sobriety.
People in alcoholics anonymous are often very conscious of the amount of time that they had been sober, and use certain periods of time as pointers to the stability of their own recovery.
Some people recognise that when they own the fact they have been sober for a day, a month, a year or 20 years that this validates that they have been sober, and their sobriety has a degree of permanence that the time period acknowledges.
Development of Alcoholics Anonymous chips.
The development of chips within AA was not actually a movement borne out by AA itself. It developed as a bit of a subculture in lots of different 12 step fellowships, and came into AA meetings with people who found them useful.
The process around the length of time that someone is sober, and the giving out of chips can be seen at many meetings.
There will normally be an individual person who has a specific commitment at the meeting to oversee this process. Either towards the end or at the beginning of the meeting, they will do a sort of roll call, asking people at the meeting how long they have been sober for.
People who want to acknowledge their length of sobriety will then receive a chip or medallion for the length of time that they have acknowledged.
Some people like these chips or medallions for different reasons, but the main one seems to be that they can carry it around with them during the day, and in some way it helps them acknowledge their sobriety, and often acts as a reminder of the primary need to stay sober and to stay focused on their own recovery