Ok, this is going to be long as I've found the foreskin docs the consultant surgeon sent me years ago.
My DS1 was referred at aged 3 as his foreskin was unable to pull back at all. It was so tight and he'd balloon every time when weeing. The consultant we were referred to was of the opinion that unless symptoms such as infections are occurring then to leave well alone.
Now my DS1 is 12 and over the years, it has almost rectified itself.
This is what I've taken from the literature the consultant sent me:
Circumcision
At birth the foreskin is firmly attached to the end of the penis. The inside layer of the foreskin and the end of the penis (the glans) have developed separately but become firmly stuck before birth. It has been suggested that this happens to protect the delicate tissues of the glans from the damages of nappy rash in the first few years of life.
In some adults the the end of the foreskin becomes scarred and can no longer be pulled back over the glans. This is called phimosis from the Greek word which means: to muzzle. In many cultures it became standard to remove the foreskin at or soon after birth and this operation is called circumcision. In the days before anaesthetics it must have been a lot simpler to and less hazardous to both patient (and surgeon!) to perform this operation on a baby than on young adult.
It varies a bit from race to race but it estimated that between 5 and 10 percent of men will need a circumcision at some time and the most common cause for the tightness is scarring of the foreskin which is known medically as ballanitis xerotica obliterans (BXO). This condition affects young adults and is rare before the age of ten and almost unheard of under the age of five.
In the past it was thought that if the foreskin was a bit tight in childhood this predisposed to the condition of BXO and surgeons were taught that if in doubt a circumcision was best idea. More recent studies have shown that the diseases are distinct. A GP on a small Danish island looked each year at all the boys in his care and found little overlap between conditions. Almost all the children that went on to get BXO had normal retractile foreskin in early life and this Danish doctor even suggested that regular retraction of the foreskin in early life might predispose to problems later on. Furthermore the traditional view that it should go back by the age of five was also questioned. Many children could not fully retract their foreskin until 12 years old but the foreskin was normal in adult life.
Problems
Too tight - if a child has BXO a circumcision will almost always be needed but just occasionally a preputioplasty will suffice. However most children who are referred because the skin is "too tight" have a normal foreskin that will not go back because the foreskin is still stuck to the glans.
Infections - Our bodies are constantly shedding dead skin cells, if you scrub yourself after a bath you will see the dead cells come off from the live cells below. Under the foreskin are two layers of cells and dead cells are shed into this closed space. The amount of cells shed increases after the age of six or seven and around this age children may present with a little cyst of dead skin in the groove between the foreskin and the glans. This dead skin is at body temperature but until the foreskin starts to separate from the glans the skin is sterile and causes no problems. However as the foreskin begins to retract, somewhere between the age of 2 and 12, germs can get into this pool of dead skin and cause an infection. This is normal and probably helps in the process of separation. Most boys have two or three episodes of such infection and these usually settle in a couple of days. The healing can be speeded up with bathing. Sometimes a short course of antibiotics may be prescribed by the GP.
Ballooning - As a boy grows he will pass more and more water and be able to pass it faster and faster. This may result in ballooning of the foreskin as water is passed. As a young surgeon I was taught that ballooning of the foreskin was abnormal and an indication for an operation. This is no longer thought to be true. It may be that the ballooning helps to separate the layers and clean out the dead skin between the glans and the foreskin.