It was created by author and statistician Dean Oliver.
For teams, the formula is: Offensive Team Rating = (Players Points*Total FG%) + Opponents Differential= 1/5 of possessions - Times Fouled+ FTM* FT% * OAPOW (Official Adjusted Players Offensive Withstand).
This stat can't be influenced by the defense of a player's teammates.
Points can be produced through field goals, free throws, assists, and offensive rebounds.
Individual possessions are the sum of a player's scoring possessions (field goals, free throws, plus partial credit for assists), missed field goals and free throws that the defense rebounds, and turnovers.