The good Zebobo731 is, in the end, correct that kratiem is Thai for garlic, and generally denotes raw, uncooked garlic. It's sometimes spelled gratiem. In the Bangkok area the "r" is not usually pronounced, so it sounds like katiem when it's said.
My colleague is also quite correct that kratiem is a very commonly used ingredient in Thai cooking. Though fancier places might mince their garlic, the simplest eateries - wheeled carts surrounded by rickety folding tables and stools where the hungry diner can get a plate of fried rice or stir fried meat and veges on a pile of jasmine rice in one minute for less than a dollar - simply pound the garlic cloves once and throw them into the wok, skin and all. I got used to whole, unpeeled garlic in my food when I lived in Thailand.
As for the fried item, it's actually called kratiem jiaw (or jiow), and it is indeed best fresh, which is why you shouldn't buy it at a store, but make your own.
It couldn't be simpler. Just heat about 1/4 cup (60 ml) oil in a wok or skillet till a bit of garlic dropped in sizzles immediately. (Check out how to deep fry if this kind of thing makes you nervous.) Add 2-3 tablespoons (30-45 ml) finely chopped garlic, breaking up any clumps in the oil, and fry the garlic, stirring occasionally, till it is lightly browned; then remove the pan from the heat and let it finish cooking in the still-warm oil. This whole process should take about 3 minutes tops; don't let the garlic burn, or it will taste awful. Cool completely, pour into a clean glass jar, and refrigerate for up to five days.
This recipe doubles well.
Thais use this in many noodle dishes and spoon it into noodle soups, but I'm sure you'll find many many non-Thai uses for it.