As parts in a piano wear, they no longer make proper contact with one another, compromising the action and its uniformity and predictability. To regulate a piano is to adjust all of the parts so that they operate uniformly and efficiently.
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Over time, piano keys become out of level with each other, unevenly spaced, and tilted from side to side (out of square). This can cause the pianist some problems when trying to achieve uniformity of sound because the uniformity of touch is not present. It also looks bad from an aesthetic perspective.