The reason behind octane is to reduce detonation.The higher the octane the higher the auto ignition temperature of the fuel.Detonation is the unintended ignition of fuel when the spark plug is not firing and the piston not a top dead center in its stroke.The higher the compression the motor more likely the chance of detonation.If you don't hear the tell tail rattling sound often described as a shaking tin can full of nails your most likely using the right octane gas.The reason some cars get better mileage on higher octane is simply because the motor is not burning fuel out turn in the firing order.Detonation is damaging to a motor and cannot always be heard.You will most likely hear it as the car shifts into the next gear under heavy acceleration or as soon the motor goes from a no load to high low condition.

 

Ummm, well, not exactly. A few comments:

• Detonation is the spontaneous combustion of small pockets of end gas long-long after the spark event has occurred and (usually) after top dead center but before the peak temperature/pressure point of 14-20 degrees ATDC (which depending upon the engine is the beginning point of greatest mechanical advantage vis-à-vis applying leverage/torque to the crank).
• Light detonation is not at all harmful to a motor, in fact, most automotive engineers I know (and I know quite a few) maintain the best/most efficient timing for the spark event is to keep each cylinder right at the point of insipient detonation.
• The reason why some cars get better fuel economy with higher AKI fuels is because they were optimized by the engine designers to take advantage of premium fuels by being able to keep the timing of the spark event, the peak pressure point and the starting point of greatest mechanical advantage all synchronized. Use gasoline with a lower AKI rating and such an engine will need to retard the spark event to the point where lower pressures/temperatures result at the aforementioned 14-20 degrees ATDC.