According to Bill Slavicsek’s indispensable 1994 sourcebook “A Guide to the Star Wars Universe,” BBY and ABY stand for Before the Battle of Yavin and After the Battle of Yavin. Said battle was evidently such a significant event in the world of “Star Wars” that the citizen crafted their own calendar around it. The Battle of Yavin, for “Star Wars” laypeople, is the climax of the 1977 film when Luke Skywalker (Mark Hamill) blew up the Death Star.
The Battle of Yavin dating standard was put into place before George Lucas began his work on “Star Wars: Episode I – The Phantom Menace,” so the year designation became very handy for nailing down exactly when events took place in “Star Wars” history. Fans soon began to extrapolate from the Battle of Yavin, and found that “Menace” took place in 32 BBY. The Clone Wars took place from 22 to 19 BBY. The mythic Old Republic was a massive extended period that spanned 25,000 BBY up to 1,000 BBY. The events of “Star Wars: The Rise of Skywalker,” meanwhile, took place in 35 ABY. It’s an easy system to remember, as the original “Star Wars” film is the turning point.
And, yes, by the rule of extended “Star Wars” lore, years are exactly equal to Earth years. The “Star Wars” universe based its hours and days on the movement of the city-planet Coruscant, which just happens to have 24-hour days and 365-day years. Also, the human-looking characters age like humans, so if someone says they’re 35, then they’re 35. This is convenient for audiences, but galling to technically-minded science nerds.
But the BBY/ABY system was used for tracking time in “Star Wars” before Disney bought the property and excised a lot of the extant expanded universe lore.