I must add that apart from its actual missions, being a member of the french academy has always been considered as a great honor. The members are elected for life by their peers, and usually are well-known writers. What you actually do when you’re an academician isn’t really important (a lot of academicians never attend a meeting, AFAIK) . What is important is knowing if you’ll be elected or not. Some famous writers spent their life trying unsucessfully to become academicians (Zola, for instance). I guess a lot of people would argue that the main purpose of the french academy is electing new members, which would be a kind of ultimate recognition for litterary talent. Academicians are often called “the immortals” though a lot of former members are actually totally forgotten now and some extremely famous writers never got elected or declined membership.
Actually, the Academie Francaise is rarely involved in the process (it’s not like its members are actively trying to invent words. They just set the rules of use for the existing language), except when it decide to create french words in order to replace an anglo-saxon one already used. Generally without much success, like with the “courriel” mentionned above. Though sometimes, for some reason, the “official” word actually stick. I saw it happen with the “balladeur” (still masculine) which replaced the “walkman”.
It’s also only one (though by far the most famous) amongst the “academies” (for sciences, arts, archeology, etc…), the one in charge of litterature, grammar, etc…
As far as the dictionary goes, exactly. If you let 20 years go by between two sequential volumes in an edition, by the time you get to Z, A is hilariously out of date.