Fit refers to the way a garment hangs on a person. If it looks sloppy vs. put together, etc. When talking about jeans, for instance, fit can refer to whether jeans are straight-legged, skinny, bell bottoms, etc. Fit has as much to do with style and personal preference than anything else. Because individuals are unique, they naturally have different desires for how an article of clothing fits on them.
Notice the difference of good fit and bad fit on a jacket and the collared shirt. The image of the man portrayed is as different as night and day:
This guy might have the looks, but the fit of his clothes are too big for him:
By contrast, take a look at the “after” pic with a shirt that fits his body and a skinny tie:
The most common basic mistake that a lot of guys make is their lack of understanding for “fitting” clothes.