The points system has been around as long as I can remember, you get a moving violation you get points and a fine. Get enough points and your license gets revoked (12 points in 2 years in MD). There's more headaches before you get to 12 but thats pretty much the top. Insurance companies get to see your points too, more points more expensive the insurance. Points stay on your license I think 3 years.
http://www.dmv.org/point-system.php