One important function of deciduous teeth is that they "point" to the molar teeth where they will erupt. If a baby tooth falls out prematurely, the permanent tooth "loses its bearings" and can grow crooked.
By the age of 6-7, these teeth will begin to erupt. This process is accompanied by the resorption of the roots of the baby teeth. This causes the baby teeth to loosen. When the shortened root can no longer hold the baby tooth in the hole, it falls out.