A national population count is used for far more than statistics. It feeds directly into how money is distributed and how representation is allocated, which makes accuracy a practical matter rather than an academic one.
Funding formulas take population as an input
Transfers from national to regional and local government are commonly calculated using formulas in which population is a primary term.
Additional terms often adjust for age structure, deprivation and density, but all of them are derived from the same underlying count.
An area recorded as smaller than it is therefore receives less across every programme that uses the formula, not just one.
Representation is apportioned from the same figures
Legislative seats are distributed between regions in proportion to population, and boundaries within regions are drawn to equalise the number of people in each constituency.
Both operations depend entirely on the count, so an error in it translates directly into unequal representation.
Because redistribution happens only after a census, an inaccuracy persists until the next one is taken and processed.
Undercounting is systematic rather than random
Certain groups are consistently harder to enumerate, including people in informal housing, recent migrants, people moving frequently and those wary of official contact.
The difficulty is practical. Enumerators cannot reach a household that has no fixed address, and self-completion depends on receiving and returning a form.
Because the same groups are missed repeatedly, the error is directional rather than cancelling out, which is what makes it consequential.
Statistical adjustment is contested
Statistical agencies run coverage surveys after the main count to estimate who was missed and by how much.
Whether those estimates should be used to adjust the official figures is a long-running dispute, since adjustment introduces modelling into a count presented as enumeration.
The choice has real distributional consequences, which is why it is argued in political terms as well as statistical ones.
The count ages between collections
Populations change continuously while the census is taken once a decade in many countries, so the figures used for allocation grow steadily less accurate.
Intercensal estimates fill the gap using births, deaths and migration records, and their reliability depends on the quality of those administrative sources.
Fast-growing areas are typically underfunded late in a cycle, and areas losing population are relatively overfunded, until the next count resets the baseline.