You can conduct usability testing in a continuum from informal to formal. There is no easy answer to that question.
Some people move from informal to formal as development progresses.
Others mix attributes of what we have here called formal and informal to find a balance that makes themselves and their users comfortable and gets them the data that they need. A usability test of a paper prototype, where users are working with screens that you have sketched, is almost always informal. You must not lead the user, defend the design, blame the user for problems, etc. In both informal and formal usability testing, someone needs to be taking notes, and you may be tape recording the sessions.