How does Linux kernel wifi driver determine when a connection is lost?

My understanding is that current WiFi driver uses rate control algorithm to choose a data rate within a small set of predetermined values to send packets over the WiFi medium. Different algorithms exist for this purpose. But how does this process work when WiFi driver decides that the connection is lost and shutdown the connection all together? Which part of the code should I read in open source WiFi driver such as MadWiFi and the likes?

Solution

The WiFi driver for your hardware which runs in Linux communicates with the WiFi chip which also runs a pretty complex firmware. The interface between the driver and the firmware is hardware specific. In some hardware the detection of connection loss events is done completely by the firmware and the driver only gets a "disconnected" event while in others the driver is also involved.

Regardless of who does what disconnection usually occurs due to either

Receiving a DEAUTH frame from the AP
Detecting too many missing beacons. Beacons are WiFi frames sent periodically by the AO (for most APs every ~100ms) . If you get too far from the AP or the AP was just powered off you stop seeing the beacons in the air and usually you'll signal disconnection or try to roam to a different AP.
Too many failures on Tx of packets (i.e. not receiving ACK frames for too much traffic) This usually indicates that you've gone too far from the AP. It could be that you can "hear" the AP but it can't hear you already. In this case it also makes sense to signal a disconnection.

For example you can look in TI wifi driver in the Linux kernel drivers/net/wireless/ti/wlcore/events.c and the function wlcore_event_beacon_loss()