The Initial element is used by Activity and State Machine diagrams. In Activity diagrams, it defines the start of a flow when an Activity is invoked. With State Machines, the Initial element is a pseudo-state used to denote the default state of a Composite State; there can be one Initial vertex in each Region of the Composite State.
This simple example shows the start of a flow to receive an order.
See UML Superstructure Specification, v2.1.1, Figure 12.97, p. 378.
Moving a diagram generally does not affect the location of elements in packages. If you move a diagram out of one package into another, all the elements in the diagram remain in the original package. However, Initial elements are used only within one diagram, have no meaning outside that diagram, and are never re-used in any other diagram. Therefore, if you move a diagram containing these elements, they are moved to the new parent package with the diagram.
OMG UML Specification
The OMG UML specification (UML Superstructure Specification, v2.1.1, p. 537) states:
An initial pseudostate represents a default vertex that is the source for a single transition to the default state of a composite state. There can be at most one initial vertex in a region. The outgoing transition from the initial vertex may have a behavior, but not a trigger or guard.
The OMG UML specification (UML Superstructure Specification, v2.1.1, p. 378) also states:
An initial node is a control node at which flow starts when the activity is invoked.