Gain structure is the relationship of levels between and within interconnected pieces of equipment in an audio chain. A proper gain structure is necessary to guaranty signal quality. Every piece of audio equipment has its own operational range, determined by noise floor and clip level. Groups of equipment have similar properties (like consumer electronics and professional broadcast equipment) but even within these groups pieces of gear can have significant differences.
To ensure proper gain structure each piece of equipment must be set with the correct levels at the signal input and internally. Levels should be set to get the best compromise between distortion caused by too high levels and noise caused by too low levels. Head room and "foot room" are the key parameters for gain structure.
Levels are indicated on meters as average (RMS, root mean square) or as peak. Peak reading shows short transients in the audio signal, the RMS reading doesn't show transients but is a more equivalent of the felt loudness of the signal. A VU meter also shows average levels comparable to loudness.
To get correct settings for levels both reading types must be considered. The rms readings also correspond to general sound energy whereas peak readings should be considered as indicators for clipping only, even if not seen in the rms reading of an rms or VU meter. A signal with high transients, clipping early, doesn't need to be 'loud'.
The highest peaks in an audio signal should be set just some dB below the clipping point. Depending on the source material peak levels are considerable above the average RMS level (for very transient signals up to 24 dB and more).
For a proper gain structure in a chain of audio devices all units should be set to clip at about the same time. The setup procedure should start at the entry point of the signal chain and all devices should be adjusted downstream all the way down to the power amplifiers. Take into account that equalization changes the gain characteristics of a piece of equipment. Equalization should be done before setting the gain structure or should be repeated after changing EQ drastically.
To control a device's operation level of its input stage the output control of the previous device in the chain or the input control of the device should be set to ensure the previously mentioned level 'just some dB below clipping point'. Here the choice of the test material or test signals is important.
Also input stages often can be overdriven by too high input signals without clear indication. Especially consumer equipment connected to professional or broadcast equipment with too high levels can cause distorted signals without any indication on their meters because these meters often are connected to the internal operation circuitry or the output stage. Turning down signals within the input stage brings down these already distorted levels and meters show proper values. In these cases sit is important to adjust the output levels of the previous device accordingly (also the issue of balanced an unbalanced connections is a very important factor in these cases).
Setting up one device after the other in the signal chain will finally result in the output level of the last device before the power amplifier(s). An often seen misunderstanding is the idea that a power amplifier's input controls should be all the way open to enable 'full power' and that a turned down input control knob of an amplifier limits the available output power. This is completey wrong! The input control of an amplifier just controls the input voltage. The more the control is turned down th higher the input signal could be without overpowering the input stage of the amplifier (if the amplifier is designed properly). If the input stage of an amplifier can be overloaded despite a turned down input control knob, the level should be 'pre-controlled' in the prior device in the chain.
The output sound power of the amplifier is only depending on the active level of the input stage of the amplifier. (high input level with controls down equal low input level with controls up).
The input level control of the amplifier is the last control used to guaranty the proper gain structure. As described above all devices are working with about the same operation levels, with even more increased input level into the entire chain all devices would clip at about the same time. In most regular installations this system level is too high to be fed un-attenuated to the amplifier (s). The fully open amplifier would lead to a lowered input signal at the first stage (first device) and set the general level too low, picking up too much noise from each device. Instead the general level should be as high as possible (within the described range) and the input controls of the amplifier(s) should be set to a appropriate level to ensure the correct sound power level in the room (or hall, or open field).
Setting up the system this way guaranties the maximum signal/noise rate and ensures that all devices are working at proper gain.