The level of accuracy will depend on how the device has to function.
Slip gauges are accurate to millionths of an inch. They have to be, otherwise they would be useless as a near absolute standard of size (But only under very closely controlled conditions) For our purposes such accuracy is not needed.
For most purposes, a 6.5mm hole will suffice for a M6 bolt, to hold two pieces together..
For greater positional accuracy, you would use a fitted bolt, in a reamed hole. Or the two parts would be dowelled, with the bolts merely holding the part together.
For a guide rod, needing to be a lubricated sliding fit in its mating part, a 25 micron clearance would suffice for most purposes.
For the power cylinder of a Hot Air Engine, the piston would be a lapped fit (like the plunger and barrel of a Diesel fuel injection pump, or an Injector Needle to its Body.)
You can make things too accurately. Years ago, after a rebuild, when King George V ran out of Paddington, it ran a hot box within a few miles. Insufficient allowance had been made for the fact that a steam engine gets hot, and more so, as it runs. The old WD 2-8-0 side rods used to clank as they moved off, but quietened as everything warmed up after a few miles
An internal combustion engine will run happily when unloaded. Apply full load, and if the Piston size and shape are incorrect for the bore (which may distort as the engine heats up) and a catastrophic seizure can result.
The converse can be an engine that is difficult to start because of lack of compression, but once running and warm, performs quite well.
Horses for courses.
Howard