All objects in space are in an orbit around something, including most satellites and the ISS which orbit Earth.
An orbit is a path in space determined by momentum and gravity. The ISS orbit is nearly circular, but many orbits are more elliptical. The higher the altitude of the orbit, the slower the object moves along its orbital path.
However, satellites do indeed "drift" in the sense that their mathematically defined orbits don't take into account other effects. Astrodynamicists call those effects "perturbations."
Low orbiting objects are not fully outside the reaches of Earth's atmosphere. Even small wisps of gas slow down a spacecraft slightly. Low orbiting objects must periodically be "boosted" back up into a higher orbit. If that doesn't happen, the object falls back down to Earth, as happened to NASA's Skylab space station.
Other objects exert a gravitational effect. Satellites orbiting Earth from a distance, such as the DirecTV satellites in the geostationary belt, are affected by the Moon's gravity.
Even the shape of the Earth plays a part. The Earth is not a perfect sphere, it is flattened at the poles and bulges at the equator. That means as satellites in high inclination orbits pass across the equator, they experience slightly more gravitation toward Earth than in the polar parts of their orbits.
Some spacecraft generate magnetic fields as part of the operation of their electronics or scientific packages. Those fields interact with Earth's magnetic field to speed up or slow down the spacecraft. That's a two-edged sword though, because engineers can use that interaction to intentionally apply an impulse to the spacecraft by electromagnetic means.
Satellites in precision orbits must deal also with low-order effects such as light pressure from the sun and the solar wind.
Toward that end, most large satellites have a guidance and propulsion system that can be used for orbital stationkeeping.
Marcel Sidi, "Spacecraft Control"
· 10 years ago