Better too small, or too large?

[The Wizard of BC]

It is a far, far better thing to have a kilt that is a bit big over one a bit small.

A kilt that is big will have the outer apron which overlaps the under apron. If it is overlapping just a bit or a lot no one can tell from the front. The only thing that would be off is the pattern if the kilt is pleated to the Sett.

But, if a kilt is too small the outer apron will not overlap the under apron. This is not usually a problem as, at first, the under apron peeking out looks like just another pleat.
But any more than one pleat width and it becomes very visually evident that the kilt is too small.

I have always believed that it is better to have a kilt a touch big over a touch small.

As you said it is not the waist that you have to worry about. The hip actually has a very large part in the overall look of the kilt. If the hip are too big you start to get the 'shower curtain' effect in the back. If too small you get gaping pleats and aprons that will not hang right.

I have seen far more kilts, that don't hang well, caused by wrong hip measurements than are caused by wrong waist measurements.