What are teraphim? They slaughter a firstborn man, wring off his head, salt it with salt and spices, and write upon a plate of gold the name of an unclean spirit and place it under his tongue. They set it in the wall and kindle lamps before it and bow down to it, and it speaks with them -- as it says (Zechariah 10:2), "For the teraphim have spoken vanity." Therefore Rachel stole them, so that they would not tell Laban that Jacob had fled; and not only that, but to root out idolatry from her father's house.
What the Teraphim Were and Why Rachel Stole Them
Yalkut Shimoni on Torah 130:12
מַה הֵן תְּרָפִים, שׁוֹחֲטִין אָדָם בְּכוֹר וּמוֹלְקִים אֶת רֹאשׁוֹ, וּמוֹלְחִין אוֹתוֹ בְמֶלַח וּבְשָׂמִים, וְכוֹתְבִין עַל צִיץ הַזָּהָב שֵׁם רוּחַ הַטֻּמְאָה וּמַנִּיחִין אוֹתוֹ תַּחַת לְשׁוֹנוֹ וְנוֹתְנִין אוֹתוֹ בַּקִּיר וּמַדְלִיקִין וּמִשְׁתַּחֲוִים לוֹ וְהוּא מְדַבֵּר עִמָּם, שֶׁנֶּאֱמַר (זכריה י, ב) "כִּי הַתְּרָפִים דִּבְּרוּ אָוֶן", לְפִיכָךְ גְּנָבָתַם רָחֵל שֶׁלֹּא יַגִּידוּ לְלָבָן שֶׁבָּרַח יַעֲקֹב, וְלֹא עוֹד אֶלָּא לְהַכְרִית עֲבוֹדָה זָרָה מִבֵּית אָבִיהָ.