I'm making a chess game for iOS and I want to label the ranks and files (columns and rows). Is it better to put the labels inside or outside the squares. Bear in mind that putting them on the outside requires a reduction in the size of the squares and therefore the touchable area.
Labels inside the boxes would generally imply that box has a "value" of 1,2,3/A,B,C; while labels outside would generally imply row/column values. A question for a small form factor (iPhone) screen would be: why include the labels at all? Who is your user base and why do they need the labels? Is it necessary for the experience, or improving it? Knowing your users could also help in placing the labels appropriately... ask real chess players what they think!