.... As regards potting on the theory (so I understand it) is that its a balance between root & top growth. If you put a small plant in a large pot it may sit for some time making lots of root & not much top growth. The idea is that you want to keep the plant moving on in a balanced way so it establishes quickly, as others have indicated above.
I also think that it has something to do with the 'ground' being part of a 'living area' full of bacteria, fungi, invertebrates etc which are continually 'working' the soil ... however a pot of compost on its own is quite isolated and doesn't have all these good things in it, so can become 'sour' quite quickly if the plant roots don't occupy the whole area ... then when the plant roots do spread out into the rest of the compost they find an inhospitable sour environment which can damage the roots and hinder growth ... regular potting on into increasingly bigger pots of fresh compost prevents this from happening and provides the plants roots with optimum conditions.
Gardening in Central Norfolk on improved gritty moraine over chalk ... free-draining.
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I also think that it has something to do with the 'ground' being part of a 'living area' full of bacteria, fungi, invertebrates etc which are continually 'working' the soil ... however a pot of compost on its own is quite isolated and doesn't have all these good things in it, so can become 'sour' quite quickly if the plant roots don't occupy the whole area ... then when the plant roots do spread out into the rest of the compost they find an inhospitable sour environment which can damage the roots and hinder growth ... regular potting on into increasingly bigger pots of fresh compost prevents this from happening and provides the plants roots with optimum conditions.
Gardening in Central Norfolk on improved gritty moraine over chalk ... free-draining.