Just to be on the safe side, you can use this word when talking to -or about- a lady. It works for all-kinds of situations, formal or informal. It is almost like using “madam”.
If you know the marital status, then you can use ‘señora’ for the married woman and ‘señorita’ for the unmarried. ‘Muchacha’ is used only for acquaintances. ‘Nena’ [baby] is supposed just for small female children, younger than a ‘niña’ [girl].
Example:Doña Lydia vendrá a la fiesta
Translation:Mrs. Lydia will come to the party