The text height setting controls the height of text, measured in drawing units. Set this value initially so that text used for your most common annotations, when scaled to the size at which you will print a drawing, measures 1/8-inch high on the printed drawing.
For example, if you plan to print your drawing at 1/8"=1'-0" and you want your text to be 1/8-inch high in the final drawing, create that text 1 foot high (in your real-world drawing units) so that when you print it, it appears 1/8-inch high on the paper. You must create text 4 feet high that you want to print 1/2-inch high.
NOTE The default text height only applies if the current text style height is 0.0. Otherwise, the text height for the current style takes precedence.