I wanted to write something intelligent about the Dunbar number, which often turns up in discussion of guild size, but then found that the Life with Alacrity blog had covered the subject already pretty well.
Basically the Dunbar number is the number of people your brain can keep tab of as belonging to "us", your maximum social network. The number of 150 for humans is an extrapolation of the observation that the group size in primates depends on the size of the neocortex region of the brain. While not being a hard fact, it has been observed that for example guilds in MMORPG often are limited to less than 150 members, and break up when growing beyond that number. Your brain is simply unable to trust more than 150 individuals, especially when these individuals are not instantly recognizable as belonging to your "tribe". Which explains (but not excuses) a lot about xenophobia and racism.
It also explains why you are not likely to see any MMORPG having raids of much more than 40 people. It is unlikely that all the people in your social network are online at the same time, so getting 40 trusted people together is already hard enough. Enough raids already break up in bickering after things go wrong as it is, and if you increased the maximum number of people in a raid, it would only make matters worse.
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