Opening the book…
This is the rule people break most often and pay for most reliably. Food gives off moisture as it cooks, and that moisture has to escape as steam for browning to happen. Pile too much into the pan and the pieces sit shoulder to shoulder, the released water cannot evaporate fast enough, the pan temperature crashes, and everything stews in a grey puddle instead of searing golden. Mushrooms weep, meat turns from pink to grey without ever browning, vegetables go limp. The maddening part is that crowding feels efficient, one big batch, done faster, when it actually guarantees a worse result and often takes longer as you wait for the flood of liquid to cook off. Give the food room and it browns; crush it together and it boils.
Leave space between the pieces, ideally enough to slide a spatula between any two. When in doubt, cook in batches rather than one heap, and keep the finished batches warm in a low oven. Use a pan big enough for the job, or accept two rounds in a smaller one. Watch for the tell: if you see liquid pooling and hear a dull simmer instead of a sizzle, you have crowded it, so pull some out and let the pan recover. Resist the urge to save five minutes by doubling up, because browning is where most of the flavor lives.
When you actually want to steam or braise, crowding and liquid are fine, even wanted, because browning is not the goal. Blanching and boiling do not care about crowding the way searing does. And a very powerful burner with a heavy pan can tolerate a fuller load than a weak one, since it recovers heat faster.