Just like prepping and priming your models, when hobbyists and mini gamers first start to paint miniatures, one of the largest mistakes they make is not thinning paints. Acrylic paints, the most common of all the hobby paints and the ones readily available from your game company of choice, are nothing more than a pigment suspension in acrylic polymer emulsion. Basically, they are colored pigment mixed into a medium. Depending on the company and the color, the consistency can range from a milky thin liquid to a gelatinous glob of paint. While you can save a lot of time by applying paint directly from the pot, you can take steps to improve the quaility of your paint job with a relatively easy process. Regardless of where you get your paint from, thinning your paint is a good idea for many reasons when painting miniatures.
The first reason is that non thinned paint can wind up chalky and showing brush strokes. While this can be a good effect that you can use on miniatures sometimes, it shouldn't be how it is all the time. Lighter colors, such as white and yellow, tend to suffer from the chalky effect, and it can ruin the color and make it even harder to make the color achieve proper coverage. This also occurs as the paint dries while using it. Thinning your paint also provides an additional amount of liquid to keep the paint, for lack of a better word, lubricated while you use it to keep it from drying out longer. While some may balk at that concept, keeping your paint as pliable as possible is important as it allows you to maintain control of the paint longer. This helps to produce better lines on your models as well as ensure that you keep the paint where you want it to be. I know that it can seem counterintuitive that the thinned down paint would stay where you want it to go easier than thicker paint, but that's part of why you primed your miniature to have nearly sandpaper texture before. Thinned paints apply smooth even coats of paint, resists brush strokes and can be used to define detail, where unthinned pains tend to obscure details. This is particularly evident on things like faces on miniatures. Think of using unthinned paints like those overly done makeup effects in movies where the actor looks more cartoon than human.
The second reason to thin your paints is to assist with layering and blending your colors. One of the goals of a miniature painter is to simulate real life color effects. While you are working with real life miniatures and paints, at the scale in which we model natural highlighting and shading are extraordinarily difficult to see with the naked eye. Because of this issue of scale, we simulate this through layering of colors, highlights and shades. To make color transitions look more natural, you want to gradually build color up from the base coats to the highlights, and this usually means multiple layers of colors. This lets you slowly build your colors from darkest to the brightest and makes the transition between colors look that much smoother and more natural. Non thinned paints can be used, but it makes things like highlights and shading look much starker in contrast to your base colors than it would be otherwise, and tends to be a bit more difficult as the thicker the paint, the less of the previous color or underlayer you are going to see which can create artificial breaks or lines in the color to the eye. Third, thinning your paints allows you get a longer life-span out of the paints you use. Most paints designed specifically for miniatures will run you anywhere between $2 and $10 USD for a rather small bottle or pot of paint. Sometimes colors get discontinued or formulas change, and if you run out of a certain shade you may be hard-pressed to find a match. By thinning your paints you will need to use less over the course of each miniature to achieve coverage and complete your painting tasks. This is probably the most minor of the benefits, but one that will have appreciable impact over time.
At the most basic level, you will need a thinning agent. Something to dilute the paint and change the viscosity. There are several ways to do this, and if I've learned anything in my time as a commission painter it's that everyone has their preferred method and each one is hotly debated. One thing remains the same, though, and that is the desired consistency of your paint. Almost all painters who thin their paints are of the mind that you want the paint mixture to be roughly the same consistency as 2% milk. This allows it to be thin enough to properly blend, and allows it to flow evenly and nicely off of your brushes onto the model without clinging to the bristles and allows you to have a good amount of control over your paint.