Detection of peroxide gives the initial evidence of rancidity in unsaturated fats and oils.
[1] The double bonds found in fats and oils play a role in autoxidation.
The best test for autoxidation (oxidative rancidity) is determination of the peroxide value.
Autoxidation is a free radical reaction involving oxygen that leads to deterioration of fats and oils which form off-flavours and off-odours.
The base produced in this reaction is taken up by the excess of acetic acid present.