Copyright holders use Content ID to identify and manage their content on YouTube.
Videos uploaded to YouTube are scanned against a database of files that have been submitted to YouTube by content owners.
When Content ID identifies a match between your video and a file in this database, it applies the policy chosen by the content owner.
Read more on YouTube's help section: YouTube Content ID
YouTube Content ID allows you to claim royalties on all YouTube videos where your music is used, was it on your own channel (videos you have uploaded) or from audiovisual content uploaded by other users (User Generated Content)