Google's Android Team is responsible for developing updates to Android; these updates contain new features, bug fixes and enhancements at the core to the platform.
Once completed, the Android team make these updates available to the Android Open Source Project (AOSP).
Think of these releases as a blueprint or reference diagram, although the software exists, it's not in a usable state.
It is designed to help manufacturers build the new features of Android into their devices, not to be run on a device directly.
If this update is a major upgrade (such as Android 6.0 to 7.0) Google will select a handset manufacturer to partner with and work together to develop a demonstration device.
It's important to note that this work has been ongoing for many months prior to Google making the announcement, which gives that particular device a significant head-start on the journey that other devices must catch up.
Other device manufacturers then take this blueprint for the new release and decide whether or not the devices they have in the market have suitable hardware and technical specifications to work with the new Android update.
For those devices that meet the minimum requirements, the update continues to the next stage of the journey – manufacturer development.