The "Form action" attribute is a critical component in HTML forms, serving as the destination for the form data upon submission. It specifies the URL of a web page or a server-side script, such as a PHP file, that will process the form data.

The action attribute can be used with both the GET and POST HTTP methods, each having its distinct characteristics. The GET method appends the form data to the URL in name/value pairs. This is visible to the user and has limitations on the amount of data that can be sent, making it less suitable for sending large amounts of data or sensitive information. The POST method, on the other hand, sends the form data as part of the HTTP message body. This method is not visible to the user and does not have limitations on the amount of data that can be sent, making it more suitable for sending large amounts of data or sensitive information.

Let's look at an example of how to use the action attribute in an HTML form:

<form action="/submit_form.php" method="post">
  <label for="fname">First name:</label><br />
  <input type="text" id="fname" name="fname" /><br />
  <label for="lname">Last name:</label><br />
  <input type="text" id="lname" name="lname" /><br /><br />
  <input type="submit" value="Submit" />
</form>

In this example, when the user clicks the 'Submit' button, the form data is sent to the 'submit_form.php' page for processing. The form data consists of the first name and last name entered by the user.

Setting the action attribute correctly is crucial to ensure that the form data is sent to the right place. If the action attribute is missing, the form data will be sent to the same page that the form is on, which might not be equipped to handle and process the form data, potentially leading to data loss or security issues.