A frequent cooking mistake is said to be overcrowding the pan. To say that you should never overcrowd a pan when cooking, however, is not an accurate statement. It depends on what type of cooking you are doing. When you are pan-frying, pan-searing, or sauteing you should not overcrowd the pan.
One of the biggest keys to flavor and texture when using any of the above cooking methods (yes, they are all slightly different), is the browning, or Maillard reaction, that occurs on the surface of the food when it comes into contact with the heated pan, aided by oil or fat.

The other day, I was eating lunch in an unfamiliar restaurant with a large group of people. The menu was quite large, and so, not knowing what was good, I ordered the Black Angus Burger.
Now, don’t get me started on the Black Angus thing. I ordered it because it was the only burger on the menu. I sometimes forget my own common sense and fall back on the mistaken notion of “who can screw up a burger?”
Screw up the burger they did. In fact, when I first bit into it I thought the meat may be tainted. Another taste revealed the unmistakable truth. “Ugg…the burger is boiled,” I muttered to my wife. She wasn’t sure what I was talking about, of course, as I often say confusing things like this. Indeed, why in the world would anyone boil a burger?

Moisture Release From Food in Overcrowded Pan
Well, I did not mean that they had actually cooked a burger patty in a pot of boiling water (although this is not unheard of). What I meant is that they had used a ground beef mixture that was too lean with too high a moisture content, and too little fat, and cooked it over too low a heat. The result is much like what can happen if you overcrowd a pan.
When the meat hits the hot surface, it starts to bleed off moisture. If there is not enough room and if the temperature is too low, this moisture will create steam and even standing boiling water. Instead of browning and getting a nice tasty sear, the burger boils in its own juice or steams. Boiled beef is a fairly nasty-tasting dish.
If you’ve ever browned a large amount of ground beef in a skillet and tasted it, you probably recognized, to a degree, what I am referring to. Browning such large amounts of ground beef gives off a lot of water, and as a result you are mostly boiling the meat.
Since we usually season ground beef heavily or mix it with a heavy sauce of some kind, you don’t notice the boiled taste. But you would notice on a burger!
A similar thing can happen with chicken. If you are trying to brown chicken breasts in a fry pan, and you cover every inch of the pan with chicken, you not only reduce the heat, preventing browning, but cause much more moisture to be released than can be evaporated quickly.
This results in a layer of steam and/or water, both of which prevent browning. Too much food then traps this moisture, delaying or preventing the browning altogether.
If the overcrowding is severe enough, you end up poaching the chicken breasts instead of browning them. The same thing goes for fish, meat, French fries, or anything you want to fry instead of steam.
For Even Browning and Searing, Cook Large Amounts in Smaller Batches
If you want a nice even browning or searing and the flavor that comes with it, but you must cook large amounts, then it is usually best to do so in batches. And remember that heat is your friend.
If you are using a batter or a breading, the oil temperature must be optimal, as well. Let’s say you are pan-frying a breaded fish, using a standard cornmeal and flour mixture.
If your oil temperature is too low, the breading will not brown and turn crispy fast enough and will instead absorb the oil, resulting in an oily piece of fish.
If you overcrowd the pan, even if the temperature is initially optimal, you may cause the temperature of the oil to dip too low, thus delaying browning and crisping.
If the oil is too hot, of course, the breading or batter (for deep frying) will simply burn before the fish is cooked. For the most part, 375° F is the sweet spot for this purpose.