There are three things you should become familiar with before understanding the problems that can be caused by power steering fluid. You'll need a quick understanding of how the steering mechanism of your car works, how power steering works and why you need power steering fluid. Then learn to identify problems that can be caused by power steering fluid--they can be catastrophic and costly if you don't properly maintain your vehicle.
How Steering Works
Attached to the steering wheel of your car (that's the round thing on the inside of the car that you turn when you want to make your car go right or left) there is a thin rod of metal that runs from the wheel to a worm gear. At the end of the rod (known as a torsion bar), a worm gear is basically a flat notched wheel that runs to a perpendicular grooved rod that is turned by the worm gear. Imagine a spiral on the shaft that runs between the two front tires and the gear at the end of the steering wheel fits on such that when you turn the steering wheel left, the gear runs along the spiral grooves to the left and when you turn right it runs along the spiral grooves to the right.
Advent of Power Steering
Before engineers figured out a way to make the steering easier, turning the steering wheel required some arm strength (torque) on the shaft that was leveraged by the worm gear to turn the tires. But they figured out a way to make that much easier by adding a fanned pump that pushes hydraulic liquid to the gears and circulates it back into the pump. It's pumping all the time so now you have the pressure of the liquid, known as power steering fluid, that helps turn the gears that move the tires one direction or the other. It's kind of like a windmill except instead of air, the fan blades are turned by the fluid. That is the simplest way to explain it without getting into the complications of the actual parts involved. See the picture attached if you want to know the names of the parts that complicate matters.
What Can Be Wrong
The fan mechanism is powered by a pulley that will wear over time. Without routine check-ups and periodic replacement of the belt, the fluid stops circulating and you're back to providing all the force yourself to turn the wheels. Should that happen, immediately have the power steering checked. But it can get worse than that.
Wear & Tear
There are seals and gaskets and O-rings that assure the system remains closed and is able to sustain the pressure (power) it needs to help turn the wheels. Over time, things wear out. The pulley, for one, but that isn't catastrophic. When the seals and gaskets and O-rings wear out or dry out, the rubber materials they are made from can enter the power steering fluid. Power steering fluid should have a pinkish or amber opaque colour when you check it. And you should check it every 10,000 miles or so or when you change your oil. If the colour becomes darker and brackish, it's a sign that the seals are starting to wear away. The danger in this is that it can clog the pump. And when the pump gets clogged, it stops circulating the steering fluid and can overheat, seize and basically die. Now you're talking about an expensive repair job. You not only have to replace the fluid, you must also replace the pump, which for prudent car owners means replacing the pulley and seals to get everything working as good as new. The problem is, if the pump seizes and you're relying on power steering, it can become dangerous to drive because the torque that you're accustomed to applying won't be available and all of a sudden you don't have power steering. Depending on the circumstance when failure occurs, this could be very dangerous.
What to Look For
To begin with, when you're driving listen for an unusual whining noise when you make turns. This could be a warning to check out the power steering fluid and the pump. Periodically check under the engine area for leaks. They'll look like oil spots on the floor of your garage or driveway, assuming you park your car in the same place most of the time. When you see oil spots, something is leaking and it should be checked. If there is pooling or puddling, immediately take the vehicle to a service centre. To run the power steering without fluid will burn out the pump and mean a major repair. To be on the safe side, check the power steering fluid every three years or 5,000 miles or so. If it is starting to turn a dark brown colour, it's time for a fluid change