Definition of FAT16
Before introducing FAT16 file system, users must know what FAT is. FAT is abbreviation of File Allocation Table. Just as its name implies, it is a table marking the position of files. It is very important for the use of the hard disk. If FAT is lost, the data on the hard disk can not be used because it is unable to be located.
File system of different operating systems are different. In the operating system of personal computer, FAT16 is used in MS-DOS and low-level version; HPFS is used in OS/2 and NTFS is used in Windows NT. And MS-DOS 7.10 and ROM-DOS 7.10 both provide FAT16 and FAT32 for users. The most file system we contact is FAT16 and FAT32.

FAT16 File System
The configuration files of every sector are expressed by 16 bytes in FAT16 and this is why it is named FAT16. Because of the innate limitation, when it exceeds the regular capacity of the sector, the number of the cluster must be expanded to adapt to larger disk space. Cluster is the allocation unit of disk space, just as a grid of bookshelf in library. Every file must be allocated enough cluster, then it can be stored on the disk.
The relationship between capacities of sector and cluster in FAT 16 are following:
Capacity of sector 　Capacity of cluster
16MB-127MB 　2KB
128MB-255MB 　4KB
256MB-511MB   8KB
512MB-1023MB 　16KB
1024MB-2047MB 32KB
If users want to store a 50KB file in a 1000MB sector, you will use 4 clusters because the capacity of one cluster is 16KB. But if the file is 1KB, it also takes up one cluster. Then can the left space of that cluster be used? No! Therefore, when the disk is used, the more or less space will be lost.
By that on, FAT16 has two big weaknesses:
(1)Disk partition capacity is 2GB at most. If you want to buy a new computer, its hard disc capacity must be 2GB at least. And 3.2 GB, 4.3GB and larger hard disk can be found everywhere. They are cheap and fine. FAT16 file system can not fit the large capacity hard disk, so it has to be divided into several disk spaces. And the capacity of partition disk is related to cluster, which exerts a tremendous influence.
(2)The usage of cluster is not appropriate. For example, if a 1KB file is set in a 1000MB sector, the space it takes up is not 1KB, but 16KB, so 15KB is wasted. The sizes of the current popular HTML file are 1KB or 2KB, and dozens of HTML files are used in the establishment of one website. If there are 100 these kinds of little files in your disk, the disk space you waste varies from 700KB (sector of 511MB) to 3.1MB (sector of 2047MB).

In the use of Dos2.0, the management capability of larger disk is demanded. So in Dos3.0, Microsoft released new file system Fat16. Except the adoption of 16 bit partition-table, Fat16 and Fat12 are similar to each other. Actually, as the length increases by 4 bytes, the number of available cluster increases to 65,546. When the total number of clusters is below 4,096, the partition table of Fat12 is used. When the needed clusters are more than 4096, the partition-table of Fat16 is used. The disk management capability of the new released Fat16 system is 32M, and it was large enough at that time. In 1987, the development of hard disk promoted the development of file system. Fat16 after Dos4.0 could manage disk of 128MB. Then the number becomes bigger and bigger, until 2GB. In the decade, the disk management capability of 2GB is beyond actual need.
What is needed to point out is that a unique technology named VFat is used to solve the problem of long file name in Windows95 system. The zoned format of FAT16 has serious defect: low efficiency usage of large disk. In series of DOS and windows of Microsoft, disk file is in denomination of cluster, and a cluster is only allocated to one file, no matter the file takes up how much space of the cluster. Therefore, even a very small file also has to take up a cluster, and the left space of this cluster is unused, which make the waste of disk space. Because of the limitation of capacity of partition-table, the bigger FAT16 partitions become, the bigger the capacity of every clusters becomes, which increase more waste.

Using FAT 16 to Maximize Partition Size
Microsoft MS-DOS 4.0 and the new edition allows FDISK to divide hard disk into 4GB partitions at most. However, MS-DOS FAT file system is only in support of partitions of 2GB. According to this fact, the capacity of hard disk between 2to 4 GB must be divided into multiple partitions, and capacity of each partition should be less than 2GB. The maximum number and size of cluster supported by FAT file system decide the limitation of 2GB. FAT system is limited to 65,525 clusters. The size of cluster must be powers of 2 and less than 65,536 bytes. So the maximum cluster is 32,768 bytes (32K). The maximum number (65,525) multiply by the maximum size (32,768) and the result is equal to 2GB.
Because every cluster of 32K could be a waste of space, FAT system is not always the best way to manage hard disk. NTFS is used in Microsoft Windows NT, and it uses another file (cluster program). The edition 1.3 of Microsoft OS/2 is in support of HPFS, which also uses a more conservative way to allocate disk space.

NOTE:
Microsoft Windows NT is also in support of FAT driver. Windows NT 3.51 is in support of FAT driver of 4GB at most. MS-DOS or Windows is not in support of FAT driver from 2GB to 4GB. In other words, if MS-DOS, windows, and Windows NT are allowed to visit FAT driver, the capacity of FAT driver must be no more than 2GB. If users use later version from Windows NT to visit FAT driver, the capacity of the driver could vary from 2GB to 4GB.