Full form of RFD is Ready for Dyeing. RFD fabric is stage of fabric where fabric is prepared for dyeing or printing process but not yet done.
Prior to dyeing and printing process of cotton fabric (Greige fabric) washing is done to remove wax, fibre impurities, seed coats, dirt and oils spot from fabric to improved dyeing uptake and evenness. Garment manufacturer can source cotton fabric in Greige or RFD form.

Related terms
PFD (Prepared for Dyeing):
PFD stands for prepared for dyeing. PFD fabrics are treated so that they will take dyes really well. Generally, PFD fabrics have no optic whiteners or any sizing, starches, or finishes that could interfere with the dye. PFD fabrics are unbleached, untreated fabrics that are specifically designed to be dyed. They are made using a special process that ensures the fabric is free from any coatings, finishes, or sizing agents that could affect the dyeing process.