Inanimate objects can have spirits or energies attached to them, but they cannot become possessed. From my understanding, only living breathing creatures (humans most generally) can become possessed.
The most common type of magic that I know of (and have used) when working with poppets is something known as absent healing. You create the poppet and make it as close to the likeness of the individual as possible. You then fill it with items or pictures of the ill individual and healing herbs. After which, you raise energy and direct it toward the poppet. You visualize the poppet and the energy directed toward it healing or providing comfort to the individual that the ritual is directed toward.
If you can find it, The Witch Book: The Encyclopedia of Witchcraft, Wicca, and Neo-Paganism - Written by Raymond Buckland has information on both poppets and absent healing.