On-Board Diagnostic systems are in most cars and light trucks on the road today. During the ’70s and early 1980’s manufacturers started using electronic means to control engine functions and diagnose engine problems. This was primarily to meet USA EPA emission standards.
Through the years on-board diagnostic systems have become more sophisticated. OBD-II, a new standard introduced in the mid-’90s, provides almost complete engine control and also monitors parts of the chassis, body and accessory devices, as well as the diagnostic control network of the car.

What OBDII DOES NOT DO is give access to all the other on board computers or ECUs (Electronic control Units) in a vehicle. There could be as many as 70 of these on a luxury car and they can be for many controls: ABS/Brakes, Airbag/SRS/Safety, Instrument Cluster, Air Conditioning, Suspension, Steering, Lights, Wipers, Doors etc. etc

The service industry calls the Check Engine light on your dash an “MIL” or Malfunction Indicator Light. It shows three different types of signals. Occasional flashes show momentary malfunctions. It stays on if the problem is of a more serious nature, affecting the emissions output or safety of the vehicle. A constantly flashing MIL is a sign of a major problem which can cause serious damage if the engine is not stopped immediately. In all cases a “freeze frame” of all sensor readings at the time is recorded in the central computer of the vehicle

To understand more about the OBDII standard and how it works, please read the Wikipedia article HERE