The short story: A higher thread count usually indicates a better quality fabric, which should be softer and have a finer texture. Higher Thread counts also cost more.
Linen Obsession's Guide to what Thread Count really means:
“Basic quality” bed linen has 132 to 144 Thread Count
“Good quality” starts at 180 to 220 Thread Count (great for kids rooms)
“Great quality” is 300 Thread Count plus (great for master bedroom)
“Excellent quality” has 400 Thread Count (great for guest rooms)
“Luxury” fabrics have 500 Thread Count or more (real luxury)
Thread count simply refers to how many threads are woven (both ways) into each square inch of fabric. It indicates how "fine" the fabric texture is.
Can you verify the thread count yourself? Unfortunately not, as the human eye cannot count see even 200 thread counts per square inch. A special counting device is used by professionals to measure the thread count.
See Link below for "Which Thread Count Should I Buy"?
Additional Information for people who love the whole story !
Thinner threads have to be used to make a higher thread count fabric - because you have to fit lots more threads into the same space!
Therefore if a fabric is higher than “300 Thread Count”, the fabric may be less strong, due to thinner yarn used. This is why “300 Thread Count” is considered by many to be the perfect thread count for sheets – it’s a fabric that looks and feels great, but is still strong and durable.
Don’t assume the only definition of luxury bedding is a only a high thread count! Whilst Thread Count is an important factor; there are other features which are equally important when measuring linen quality:
a) The type of cotton used e.g. carded/ combed/ pima/ Egyptian cotton
b) The quality of the cotton or "grade of cotton".
c) The type of fabric weaving.
d) The manufacturing processes.
e) How the fabric was finished.
f) The quality of the dyes & pigments used to colour the cotton.
g) The sewing quality and details.
h) Any additional decorations or embroidery on the fabric.
It’s always better to buy high thread count bed linen (or even Egyptian cotton bedding) from a trusted brand, then you know you will get the right mix of quality components.
Technical Information of Thread Count: Thread Count is defined as the number of threads woven into one square inch of fabric. This number is based on counting the number of threads woven horizontally ("weft") and vertically ("warp") into the fabric. Some weavers may use “multi-ply cotton yarns” (i.e. yarn that is made by twisting together a number of shorter or thinner threads) to increase the claimed thread count.
A true thread count should be based on single threads only.
Single threads (i.e. long fibre or long staple length) “single-ply” cotton yarns are usually of higher quality. This is why the idea that high thread count alone equals better quality isn't always true. Most weavers report that the maximum number of SINGLE threads that could be woven into each square inch of fabric is 500 to 600. Any fabric above 600 Thread Count is usually using double cotton threads. So a 1000 thread count fabric is actually a 500 thread count x double cotton threads used = really only 500 Thread count.
(Image credit: Australian Textile Mills)