It protects plant crowns and reduces compaction. But if the layer gets too thick, water, air and fertilizer can't get through to the soil and grass roots. Runoff increases and dry spots appear. Or when it's wet, the thatch can remain saturated and suffocate roots. Leaving grass clippings on the lawn when you mow does not cause thatch.
Clippings break down quickly in most cases.
Thatch is made up mostly of stems and roots that decompose more slowly. Thatch usually occurs on turf that has been heavily fertilized, and is most common on poorly drained, compacted and acidic soils. Of the species of lawn grasses, fine fescues are most prone to thatch problems. The best way to relieve thatch problems is by core aeration. Contract with a local landscape company for service or check with your local equipment rental center.