The meaning of the term varies depending on whether stocks, bonds, or futures are being quoted.
Most European and Asian bond and futures prices are quoted in decimals so the "tick" size is 1/100 of 1%.
If the tick is too small then too much of a preference is given to price priority meaning that market makers and the general public will have less of an incentive to post their orders well in advance since people can jump ahead of them by increasing their price by a small, virtually inconsequential, fraction.
In Europe, Mifid has resulted in a variety of multilateral trading facilities (MTF) with distinct tick size regimes for the same stocks.
[6] As of 2019, the article 49 of the new MiFID II directive requires trading venues to adopt minimum tick sizes in relation to equity and certain equity-like instruments.