It's the tension of your sts, how loose or tight they are. If a pattern suggests 16sts over 4", you should get 4 sts per inch so the sweater or hat will fit you and not be too large or too small. If you get 5 sts per inch and knit the pattern size you think you wear, it will be too small; if you get 3½ sts/inch it'll be too large. You can use a different gauge, but will have to adjust the pattern, using more or less stitches.
sue- knitting heretic