"Ideally, you should only create a guild because it needs to exist. If that sounds too zen for you, I'll break it down. You should create a guild when (a) you know players who want to form a new community, (b) you see a need that is not being fulfilled by other guilds on your realm, or (c) you can offer a significant improvement over what existing guilds are doing."
Full Article here (major points at the bottom section under 'A Better Idea'): http://wow.joystiq.com/2013/02/25/officers-quarters-dont-start-from-scratch/
Too often I see people on this realm that create a new guild just to have that 'Yay I'm the leader' mentality. While this is all well and good, you start to have the situation that Kargath has come to see. Lots of [raiding] guilds on this server have 5-6 players and instead of looking at it and saying "forget it, lets join ranks with another group of 5-6" they instead make intense recruiting efforts to keep that group or continuously pug. While that's fine and dandy, I see a lot of potentially great players sitting in a mess of a guild or trying to lead a bunch of mediocre players through content.
From the post earlier in the year No Quarter had the right idea of trying to merge with another group to make a guild capable of progression as opposed to an illusion of such. (I'm sorry, but if you can't clear normal MV as a guild by now you should probably look elsewhere.)
Many guilds on Kargath have good communities and are lead by good players but cannot fill ranks due to a larger number of the 'filler guilds'.
Now, I say this as a matter of my own opinion and what others do with this opinion is their own perogative. Should every guild break apart and fill in with the better guilds? No, the smaller and less progressed guilds are there for a reason for where else would we all have gotten our feet wet with raiding to decide if it was our thing or not? But I do feel an overabundance of those guilds is hurtful to our community as a server and to the individuals who are capable of so much more.