Short definition
A height difference between the edges of two adjacent tiles. Most visible with large tiles laid in a 50% brick-bond offset, because tiles are slightly bowed.
Lippage is the height difference between the edges of two tiles that sit next to each other. A small amount is unavoidable and invisible; enough of it catches the light, catches a bare foot and, on a floor, can be a trip hazard. It is judged on the finished floor rather than on the individual tiles, because it comes from how the tiles meet rather than from any single tile being faulty.
The main cause is tile warpage. Nearly every pressed tile is very slightly bowed, with the centre marginally higher or lower than the edges. That bow is a tolerance, not a defect, and it grows with tile size — a 1200 mm plank tile carries far more absolute deviation across its length than a 300 mm tile does. Substrate flatness and adhesive coverage add to it: a bed with hollow spots lets one tile settle further than its neighbour.
Setting out is what makes warpage visible or not. In a 50% brick-bond offset, the centre of one tile — the high or low point of the bow — lands against the corner of the next, which is where the deviation between the two surfaces is at its maximum. Reducing the offset to a third of the tile length or less brings a flatter part of the tile against its neighbour, which is why the trade convention is a 33% or smaller offset for tiles over about 450 mm.
The other controls are practical. A flat substrate is the precondition — no setting-out choice rescues a floor that is out of level. Levelling clips or a lippage-control system hold adjacent edges flush while the adhesive cures. A wider grout joint gives the eye a transition rather than a hard step. And full adhesive coverage, back-buttering included on large tiles, keeps tiles from settling unevenly in the first place.