As you draw the bow, your drawing hand might rotate a little. If the bow is held loosely, the bow can rotate to match the string. If the bow is held in a tight grip, it probably won't rotate, and the string will be torqued, resulting in a miss.
If the bow is held too loosely, and you aren't using a bow sling, which few traditional archers use, your bow hand will grab the bow when the arrow is released, or slightly before in anticipation thereof, resulting in a miss.
So the goal is to grip lightly enough to avoid string torqueing, but firmly enough to avoid grabbing the bow on release. I do this by holding onto the bow mainly with my thumb and forefinger, which is encircled around the bow, and letting the other fingers drift off to the side. There are other ways.