Contributed by: diels alder
Dormant buds at each node (axilary buds) are kept dormant by the level of auxins traveling down the stem from the shoot tip (apical dominance). The farther away a node is the less auxin it experiences, and at some certain level the bud begins to grow. We remove the growing tip to induce the formation of lateral branches by removing the source of auxin, which is mainly produced in young expanding leaves.
If enough young EXPANDING leaves are left on the plant when the tip is cut out, apical dominance will not be broken until the leaves stop expanding and auxin levels drop. So, don't skimp when you pinch and cut back to mature leaves.