It is the transformer which takes power from your local energy supplier and turns it into model train power. Your transformer needs to be the proper one. Märklin and Micro-Trains locomotives require no more than 8 volts of Direct Current (“DC”) for proper operation; higher voltages from other types of transformer risks burning out the motors. Likewise, the Märklin accessories require no more than 10 volts of Alternating Current (“AC”), with the same risks if higher voltages are used. These voltages are somewhat lower than that which is provided by a typical model train transformer. You also can power the trains themselves with a 9-volt battery using a special controller that Märklin includes with some sets.
Even though your initial track plans may be simple, go ahead and use the red wire for one track connection and a brown wire for the other. The terminals on the back of the transformer are marked so. While this may seem silly for a basic loop of track, if you ever want to add catenary for the independent operation of a second locomotive, the location of the brown rail becomes important. If you ever want to use automatic signals for train control, the location of the red rail becomes important. And if you ever want to run two trains by using the catenary control method with automatic signals, knowing which rail is red and which is brown becomes absolutely important.
Some care needs to be exercised when connecting the wires. Contemporary Märklin transformers use spring loaded clips to connect the wires. These connections are very reliable if done properly: