When people say not to give too much water, what they mean is not to water it one day, and then water it again the next day or before the soil has had time to start drying out. The roots need to be able to breath.
But if you don't saturate the soil when you water, the roots will grow downward straight into a dry pocket. The dryer that soil gets in the middle of the pot the more likely it will create these dry pockets. So the roots, not having any moist soil to grow into, will dry out as well.
I plant my seedlings right into 1 gal pots instead of party cups like a lot of people do. So I saturate the pot and then I usually don't have to water it again for at least 4 or 5 days under a metal halide.
Good luck!