It's very simple: you have two choices if you want to say something is okay. You can spell out the word in full (okay), or you can use capital letters (OK). What's unacceptable is to write 'ok' in lower case.
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The main reason for this is pronunciation. The word 'ok' on its own would, by the standards of regular English, be pronounced to rhyme with 'cock'. Using 'okay or 'OK' make it clear what you're supposed to say. Yes, I know, there are countless examples of English words whose spelling gives no clue whatsoever as to how to pronounce them, but that's all the more reason not to add to their number.
While we no longer think of it as an acronym, OK did originate that way: it was an abbreviation for 'orl korrect', itself a jokey misspelling used in the US back in the nineteenth century. The joke is long-forgotten and many of us favour the spelt-out version, but it's still OK to use the acronym if you wish.
If you really want the lower-case version, put fullstops in it ('o.k.'). Accuracy matters.
Lifehacker's Mind Your Language column offers bossy advice on improving your writing.