Gauge is a tricky concept to talk about, because it’s kind of abstract, but it’s not a tricky concept to understand. Gauge really means the size of the stitches of the knitting that you are producing. It’s usually measured in stitches per inch (for example, if you see a ball of yarn that says “4 sts/in” on the label, that means that the yarn manufacturer thinks that the yarn works best at 4 stitches per inch).
Gauge can play a HUGE role in how a project turns out. For example take a look at these two hats:
These hats are (I kid you not) exactally the same. They were both made with the Chunky Hat pattern that I posted Wednesday. The only thing I did was change the yarn and needles to change the gauge. The blue hat was knit at a gauge of about 2 stitches per inch, the red hat was knit at a gauge of about 8 stitches per inch.
So how do you get different gauges? You change two variables. Your yarn and your needles. First pick a yarn that will get you close to your gauge (by looking at the label on the yarn package you can get a rough estimate of your expected gauge). Then, through trial and error, try different needles to get your desired gauge (again the yarn label will suggest a needle for you to use).
The yarn you use will dictate (to a point) what needles you can use. For example, the bulky blue yarn is super thick, so you could probably use needles from about a 10 to about a 15. 15s are going to give you a loosely knit (large gauge) fabric, and 10s are going to give you really dense fabric with a tighter gauge. If you tried to use smaller needles (like 5s or 3s), you’d have almost no chance of being able to knit, since the needles would be so much smaller.