Why is it OK to return a 'vector' from a function?

Pre C++11:

The function will not return the local variable, but rather a copy of it. Your compiler might however perform an optimization where no actual copy action is made.

See this question & answer for further details.

C++11:

The function will move the value. See this answer for further details.

Can we guarantee it will not die?

As long there is no reference returned, it's perfectly fine to do so. words will be moved to the variable receiving the result.

The local variable will go out of scope. after it was moved (or copied).

I think you are referring to the problem in C (and C++) that returning an array from a function isn't allowed (or at least won't work as expected) - this is because the array return will (if you write it in the simple form) return a pointer to the actual array on the stack, which is then promptly removed when the function returns.

But in this case, it works, because the std::vector is a class, and classes, like structs, can (and will) be copied to the callers context. [Actually, most compilers will optimise out this particular type of copy using something called "Return Value Optimisation", specifically introduced to avoid copying large objects when they are returned from a function, but that's an optimisation, and from a programmers perspective, it will behave as if the assignment constructor was called for the object]

As long as you don't return a pointer or a reference to something that is within the function returning, you are fine.

To well understand the behaviour, you can run this code:

#include <iostream>

class MyClass
{
  public:
    MyClass() { std::cout << "run constructor MyClass::MyClass()" << std::endl; }
    ~MyClass() { std::cout << "run destructor MyClass::~MyClass()" << std::endl; }
    MyClass(const MyClass& x) { std::cout << "run copy constructor MyClass::MyClass(const MyClass&)" << std::endl; }
    MyClass& operator = (const MyClass& x) { std::cout << "run assignation MyClass::operator=(const MyClass&)" << std::endl; }
};

MyClass my_function()
{
  std::cout << "run my_function()" << std::endl;
  MyClass a;
  std::cout << "my_function is going to return a..." << std::endl;
  return a;
}

int main(int argc, char** argv)
{
  MyClass b = my_function();

  MyClass c;
  c = my_function();

  return 0;
}

The output is the following:

run my_function()
run constructor MyClass::MyClass()
my_function is going to return a...
run constructor MyClass::MyClass()
run my_function()
run constructor MyClass::MyClass()
my_function is going to return a...
run assignation MyClass::operator=(const MyClass&)
run destructor MyClass::~MyClass()
run destructor MyClass::~MyClass()
run destructor MyClass::~MyClass()

Note that this example was provided in C++03 context, it could be improved for C++ >= 11