The main aspects of dimensioning is so the machinist can make it as the designer/draughtsperson wants or needs it.
Dimensions are usually taken from a datum, there can be more than one datums.
The linear dimensions are best dimensioned from a datum (or two).
It is usual to give an overall length.
There has to be some "give" in the dimensioning of the part ie. some lengths are left dimensionless.
Eg. on your drawing the first 3 dimensions on the right add up to 1.00 + .48 + 4.08 = 5.56. Now is that the distance you require the step to be from the right hand face? What happens when the machinist makes it (bearing in mind it is difficult to make anything exactly) and the 1.00 length comes out to 1.010 is this dimension OK? Now does the machinist make the next step .48 or do they take off the .010 and make it .470? Lets say it is made .49.
Should the 4.08 length be made to take into account the actual lengths of the previous steps made? If it happens to come out 4.08 we have 1.010+.49+ 4.08 = 5.58.
(Remember it is difficult to get each and every length exactly right)
Initially from the drawing the length to the .625 dia step is 5.56" and the machinist made it 5.58" Does it matter? If that length (5.56") is important then the right hand face is used as a datum and the dimension of 5.56 is placed from the datum to the .625 step. One of the three dimensions 1.00; .48; 4.08 is then omitted usually the least critical.
The dimensions are the most important part of the drawing - it tells the machinist which part(s) are important so it can be made that way. The machinist also needs some leeway to make the part.
Now if you are the machinist/designer/draughtsperson you will know which are the important dimensions and which are not so important so how it is dimensioned for you doesn't matter.
I have said it before the dimensioning of a part is the most difficult aspect of the drawing, but it is up to the designer/draughtsperson to dimension it in such a way that the machinist can make the part exactly the way that is wanted/needed.
There clear as mud
DaveH