Cellular iPads have GPS chips. Wifi-only iPads do not. A GPS chip tells the iPad the coordinates of your current location, nothing more.
The GPS chip allows you to use Internet mapping services such as google maps, that will use your location for directions and nearby services. It will also allow you to use navigation apps such as Navigon that store the map data in your iPad, even without Internet access.
You can use Google maps, Navigon etc. without GPS, but your iPad will not know your current location.