I think you are referring to the ABS (anti-lock braking system) sensor. It measures the wheel speed and compares it to the other wheels. If you do not fix it, you will probably have a light on the dash and the ABS braking system will not function properly.
A wheel sensor reads revolutions of the wheel to determine speed of the car at any given time. Several systems in the car, like engine monitoring and transmission, rely on the sensors to regulate what they do: e.g., you wouldn't want the transmission shifting at 70 mph like it does at 20 mph.
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