I am just going to say it. I think it's a problem to be loose, and I mostly mean that to do with knitting (although I sort of think the other kind of loose is wrong too, but really, who am I to tell you how your ethics should run.)
Let's lay it out. This is the fabulous Blackwater Abbey yarn. This is the fabulous book A Fine Fleece. You should get it, it's got lots of awesome stuff in it - I'll be using it a whole lot. That said, it appears that the super-clever and creative author (Lisa Lloyd) and I have a difference of opinion in terms of gauge.
I have some preferences about gauge. I have some facts about gauge too, and those two things together have formed a concrete set of ideas about how I think things should be knit up. I like things to be knit firmly and solidly. I think that sock yarn should be knit up at least 32sts/10cm. I like to see a worsted weight yarn at at least 20sts/10cm. At least.
Garments with a loose gauge:
Knit up with lots of drape and feel softer than they might if it were tight. Knitting loosely is a good way to make garments really flowy. (That might not be a word.)
Take less yarn to knit an item - stitches tightly packed together mean more yarn per inch than stitches spread out.
Knit up more quickly- bigger needles mean the work goes faster. The fewer stitches per inch you are knitting, the fewer stitches you have to knit to accomplish your inches.
Garments with a firm gauge:
Hold their shape better. Fabric with less room to move, moves less. Garments are less likely to "grow" with age, or to bag or sag.
Having less "room" in stitches, means that the stitches tend to look more uniform and tidy.
Last longer. Tightly knit, fibers can't move against each other to cause friction, and are more durable. They pill and show wear less too.
All of these things are true, and can be positive or negative, depending on what you want, but as a general rule, I want more of the things in the firm category than the loose category, and I knit that way. The big sell for me is that if I'm going to put all of that work into a garment, then I want it to last and look great as long as it can. It's not bad if you want other things, that's what personal taste is all about, and there are times when I might choose to knit something loosely, when the fabric it makes suits me and what I want, and conversely, knitting to too firm a gauge can go too far. While I'm yet to find socks I think are too tightly knit, the kevlar-vest gauge of some traditional arans (coughalicestarmorecough) designed to turn wind and rain are a bit much for me and my modern wear. I once swatched for a sweater that was so firm at the called for gauge that I thought for sure the best way to store the resulting sweater would be to simply take it off and stand it in a corner.
When I first looked at A Fine Fleece, I was delighted to see that it was a great match for the yarn that I've got- in fact, Blackwater Abbey worsted is the suggested yarn for two out of the three sweaters I was thinking about - but I was surprised at the suggested gauge. 16 stitches to 10cm/4" for this light worsted yarn? (If you haven't met this yarn, for reference, it's lighter than Cascade 220 or Paton's Classic.) I'm not the sort to decide I don't like something without trying though, so I swatched.
(A quick note about the purl stitches that appear random there: On a swatch I purl stitches to remind me what needles I was using. 5 purls means 5mm needles. That way I don't end up forgetting which is which. It's something I started doing after the 48th time I told myself I would absolutely remember and didn't.)
I did the bottom part of the swatch with 5mm needles (as suggested) and got the suggested gauge. 16sts/10cm. Then I did the top part of the swatch with 4.5mm needles and got something I like better, but is still too loose for my taste. That's 19sts to 10cm. Then I washed the swatch to make sure that the yarn didn't bloom tremendously and change.. but it didn't.
It's hard to tell in the picture how loose these gauges are, so I took this one.
That's a lot of daylight. That's loose. Really loose. The swatch is drapey and soft, but it also moves all over the place, is really stretchy, and I can see that the loose gauge makes my stitches less uniform. I can also tell that the resulting sweater is going to be a lot like that too, and right or wrong, my personal taste says that I'm going to find it less tailored and stable than I like. (The irony that I'm talking about how I like things to be tailored and stable while wearing elastic waist jammie pants and a baggy tee shirt is not lost on me, but there you have me.) Throughout the book, most projects are knit more loosely than I would like them, to varying degrees - There's socks (knit in standard sock weight yarn) at 26sts to 10cm for example, which I know from experience I'm going to walk through pretty fast. None of this is a deal breaker -Lisa has written what is otherwise a perfect book for me, with just about every project being something I'd love to wear... Our tastes only depart in this one area- so I think the thing to do at this point is math. Lots of math. Maybe one of the bigger sizes could be knit at a tighter gauge to suit me? I'll be looking for my calculator to re-jig.
To sum up- I believe Lisa Lloyd may be loose. In the knitting way, you understand. (I hope she takes that the right way.)