The Crowd distribution (not EAR-WAR) is shipped with an embedded HSQLDB database. When you run the Crowd Setup Wizard, you will be asked to choose a database. If you choose the embedded database, the data files will be stored in the Crowd Home directory, as configured during installation.
Also see http://hsqldb.sourceforge.net/doc/guide/ch01.html#N101C2.
HSQLDB should not be used as a production database. It is included for evaluation purposes only.
HSQLDB periodically must update its files to represent changes made in the database. In doing so, it must delete the current
crowddb.data file on the file system (beneath the
/database folder in your Crowd home directory) and replace it with a new one.
If an administrator issues a shutdown on Crowd while this update is happening, data can be lost and typically all configuration data for your Crowd server will be lost.