The human body has a lot of tricks up its sleeve when it comes to healing itself, including the formation of scabs over a wound. Blood is a very complex substance chemically speaking, and several of those substances play a crucial role immediately after a surface injury. Blood platelets immediately pack themselves together in the wound itself and form a plug, better known as a blood clot. This clot can prevent or reduce further blood loss, but it can't hold on forever. As more platelets collect around the wound and white blood cells attack opportunistic germs, a new substance called fibrin starts to build a web over the wound.
It is this combination of platelets, fibrin and plasma that combine to create scabs. They function as protective caps over the wound that prevent dirt, germs and other contaminants to enter the "work site." As the blood platelets dry out, the scab usually takes on a deep, rusty brown color and develops crusty edges. It usually remains firmly in place until the skin underneath has been repaired and new skin cells have appeared. If it's prematurely removed, the revealed skin may look red and oozing. A new scab may reform, but often the new skin develops scar tissue.
Scabs should be allowed to dry completely and fall off naturally, although that is often more easily said than done. The skin underneath may become very irritated or itchy during the healing process, which may cause sufferers to claw or scratch at it. Some bandage companies even promote the use of specially treated adhesive products that prevent the formation of scabs. The treated bandage is believed to absorb the liquids and blood products that would have ordinarily congealed. Whether or not someone chooses to use bandages on a wound or else allow them to heal naturally, the key is to keep the area protected from infection and dirt.
There are a number of people who suffer from a obsessive-compulsive disorder involving the picking of scabs. Similar to compulsive self-mutilation, obsessive creation and picking can seriously harm a sufferer's social and professional life if not addressed professionally. Compulsive picking at scabs can also cause a number of disfiguring physical ailments, so it may help to use antiseptics containing an anesthetic such as lidocaine to reduce the temptation to pick or forcefully remove them.