Realization (early 1600s) stems from the Medieval Latin adjective realis ("actual", from res "thing") to the French verb réaliser, then to réalisation.    It was formed by adding -ize (a Greek-derived verb suffix meaning make) and -ation (a Latin noun suffix indicating a process or result) to the root real.    

According to the Oxford English Dictionary (OED), the earliest known use of the noun realization is in the early 1600s, with the earliest evidence dating to 1611 by the lexicographer Randle Cotgrave.   Its original meaning was "the act of making something real" or "to bring into existence" (1610s), while later usage covered "obtaining or amassing" (1753) and "understanding clearly" (1775).  The verb "realize" (bring into existence) is also recorded in the 1610s, with early evidence found in the work of John Florio. 

Realization in stories acts as a critical turning point (aha moment) where characters understand the true nature of their conflict, driving the plot progression and emontinal transformation.  It bridges internal change with external action, forcing protagonists to alter their goals, fostering empathy, and creating memorable, authentic moments that resonate with readers. 

Key Aspects of Realization in Stories: 
Character Development & Transformation: Realization scenes often facilitate the climax or propel the story into the final act by forcing characters to change. It shows the character finally understanding their internal problem, motivation, or need for change. 
Plot Shift: These moments often turn the story in a new direction, changing how the audience and protagonist see the way forward. 
The "Aha" Moment: Known as a revelation or epiphany, it is the sudden understanding of a problem's core.
Authenticity and Emotional Impact: Realizations make stories feel substantial, moving, and grounded in the human condition, helping characters move from ignorance to understanding. 
Types of Realization: These can include understanding the source of a problem, the need for a new strategy, or a profound shift in self-perception. 

2 hours ago, drpaladin said:

Realization is often depicted by a glowing light bulb.

It may show that you have a bright idea, but fortunately (in may instances), not watt it is.