An anti-lock braking system (ABS) is fitted as standard to all modern day cars as an additional safety measure. Under heavy braking, the force exerted on the brake discs can cause the wheels to lock, resulting in the car skidding along the road surface. This sudden loss of traction may cause the car to decelerate less resulting in possible impact.
ABS works by detecting wheel lock (based on a wheel suddenly stopping compared with what the car is actually doing). In order to do this, ABS rings are fitted behind each wheel which look like cogs. As they rotate, they 'strobe' past a sensor. If all four wheels are rotating at a similar rate then the controller will calculate that all is well. Should the speed measurement from one of these sensors suddenly fall to zero, then the wheel must no longer be rotating (i.e. locked up).
To mitigate this issue, the ABS system effectively applies and releases pressure to the brakes very quickly in order to regain traction and carry on stopping the car.
On mk1-6 cars, the ABS system was combined with the 'Trust' and 'Trust+' stability system which also looked at the cars behaviour in more than one dimension. The mk7 fortwos combined ABS with ESP resulting in an even more sophisticated stability system.
Should an ABS ring fail, incorrect speed readings will be sent to the ABS controller. This may result in the ABS operating every time you brake or simply just bring on the ABS (and/or warning triangle) on the dash. As a first port of call, you should check the ABS rings (also know as Reluctor Rings) when attempting to diagnose any braking problems.