Braiding can severely damage hair, resulting in breakage, thinning and baldness. According to the MedicineNet website, traction alopecia, a type of baldness, is commonly caused by tight hairstyles like braids and ponytails.
Traction alopecia occurs when braids place enough tension on individual hair strands to pull them free from the root. While the hair normally grows back, repeated abuse of the hair follicle can result in scarring, which potentially leads to permanent baldness.
Braids and other tight styles should not place undo tension on the hair shaft, which means there should be enough slack to move the braids without causing pain.