How most cell phone tracking works is typically by triangulating the “pings” made by the cell phone to the nearest cell towers. GPS-enabled cell phones don't require cell towers, and may be located anywhere in the world by satellite triangulation in a similar manner. Cell phone companies are required by law in the United States to be able to locate cell phones to an accuracy of 100 feet, so that emergency vehicles will be able to locate the caller in need.
Wait, so what's the problem? Well, cell phones are notoriously difficult to track, just inherent in the nature of the device: they're not tied down to a fixed address as with landlines, but rather can roam freely. So, there's no easy directory with a name and address associated with every phone number, like old telephone books, let alone some accessible method to track individual cell phones in real time - at least one that is available to civilians.
Here's an overview of some of the possible solutions: