Les, the Shorter Oxford is probably not a very good example. For one thing, despite its name, it's quite big.
It consists of two hefty volumes. The picture was taken several years ago, and I'm looking at volume 1 of the 1993 edition. Two more editions came out after that, the latest being in 2007. I don't know quite how big and heavy the latest one is, because I use a digital version. (An Android app from a company called MobiSystems.) One blurb for the latest edition says:
The Shorter Oxford English Dictionary contains an incredible one-third of the coverage of the 20-volume Oxford English Dictionary and includes all words in current English from 1700 to the present day, plus the vocabulary of Shakespeare, the Bible and other major works in English from before 1700.
One reason why I often refer to the Shorter Oxford is that it seems to be about as inclusive as our word list. Any obscure rare word accepted in Chihuahua is likely to be defined in the Shorter Oxford - and any word in that dictionary is likely to be in our word list. Of course there are many exceptions. And the Shorter Oxford is not much use for evaluating recent words, since it hasn't been revised for 10 years. And there has been no announcement of any plans for a new edition.
So that's the other main reason why this dictionary is not typical in relation to the release of new editions. It looks likely that there are not going to be any further editions. In this respect it is different to the biggest of the Oxford dictionaries, the OED, because the OED is being continually revised and the updated material is available online by subscription. So, although there will certainly never be another print edition, the publishers are trying to bring the content up to date.
On your question about what criteria are used to include new words, I believe most dictionary compilers aim to reflect the way English is used, so new words will mostly result from new usage evidence. Occasionally it might be like the case of
croft as a verb where the usage has been happening for a long time but hadn't been noticed by dictionaries. More often it would be a case of usage changing, as in the use of
text as a verb that resulted from text messaging on mobile phones. One of the major changes in the 2007 edition of the Shorter Oxford was dropping thousands of hyphens.
Ice-cream became
ice cream and
bumble-bee became
bumblebee. This seemed to be intended to reflect a trend for writers to use fewer hyphens, but also perhaps to support and encourage that trend.
Should you update your dictionary? If you're happy to start looking things up online, there are plenty of good dictionaries available via the
OneLook website. Other dictionaries are available online via subscription, but if you're a member of a public library you may be able to use them from your home computer free of charge. If you want to keep using a printed dictionary, well 43 years is a long time in lexicography, so it might be time to think of an upgrade. I don't know how old mkenuk's beloved COD is. I suspect it's not the latest, 2011 edition, but probably a bit more recent than 1974.