Biochemically, ABA is a 15 carbon derivative of zeaxanthin, a carotenoid, with the following chemical structure.
Seeds in the ground remain dormant, in a state of suspended growth. The production of ABA is high during late embryo maturation which drives dormancy. Dormancy must be broken for the seed to germinate. When it is time for the seed to germinate, gibberellic acid and ethylene production results in a cascade that mutes the detection of ABA breaking dormancy. Germination then occurs and the plant grows.
As plants grow they can encounter many abiotic stressors. Personally, I research abiotic stress biology so I find the stress responsive role ABA plays to be one of the most interesting. Plant perception of environmental conditions such as, high salt, low water, cold, and wounding, all involve ABA. These stressors increase ABA levels which in turn activates stress responsive genes. The main function of ABA in all of these stresses seems to be controlling the water level within the plant in a number of ways, including gene activation, increasing water uptake in the roots, and closing the stomata.
Flowering is an important stage in plant development, resulting in the production of seeds and the next generation of the species. As with all developmental phases, several hormones play important roles. The ratio of each and amount of cross-talk between the various hormone pathways results in the change of developmental stage. Floral development requires an increase in ABA and decrease in ethylene to the proper ratio.
As the plants age, they will inevitably undergo senescence and die. The biosynthesis of ABA, along with a suite of other hormones, is increased while cytokinin is decreased. ABA works in a positive feedback manner. As ABA levels increase, water and minerals are pushed out of the leaf and into the stem. This results in dehydration of the leaf and further production of ABA. This sets up the leaf for abscission which is controlled by ethylene.
As we can see, ABA is an incredibly important hormone. It plays a role in almost every developmental stage a plant undergoes from germination to senescence. How exactly the plant knows when ABA means flowering, dehydration stress, or senescence is still a mystery. It is probably in part to genetic control, age of the plant, and coordination with other hormone levels. Plant growth and development is just as complicated as it is in animals.