This is a post I've wanted to make for a while. RPF fandoms tread a careful line between headcanon and theory, especially the One Direction fandom, so I thought it'd be good to talk about the distinction and when it crosses a line.
Headcanon - Something you personally like to think about a person/character that you're aware is likely not true/canon. This brings you joy and may fit the person/character or may not, but it's functionally not necessary for a headcanon to be grounded in reality.
Theory - Conversely, a theory is something you believe is actually true/canon about a person/character. These are backed by evidence and/or hints, and are firmly grounded in what you believe reality to be.
Most of the time in fandom, ships fall under headcanon. They're not usually canon, they're usually just for fun, and that's a common fandom dynamic. It gets a bit trickier in RPF fandoms, though, but even then you frequently see people ship for fun rather than out of genuine belief in the relationship.
The One Direction fandom is unique in the sense that most of the shippers here are Larries, and most Larries (myself included) genuinely believe Harry and Louis are in a relationship. That is a theory, as opposed to a headcanon. Larry is backed by evidence, and it's rare to find Larries who only ship it in a fictional sense.
Now, neither of these types of shipping are inherently better or worse than the other, but the difference is important when establishing what is and isn't okay. Shipping in a fictional headcanon sense is almost never a problem- have fun with your dolls! But shipping in a genuine theory way can easily step into concerning territory, and we've seen that in this fandom with ships like Haroline and Gryles.
Because I'm planning a full Haroline retrospective, I'll use Gryles as my main example in this post. People who ship Gryles in a theory way- genuinely believing they were/are together, disgust me. Nick Grimshaw met Harry when Harry was underage, and Nick was much older and in a position of power having been in the entertainment industry longer via radio. That sort of dynamic would be inappropriate if they were to be in a real relationship.
But some people who ship Gryles do so in a headcanon way. They use it as a side ship in fics, or like exploring fictionalized portrayals of toxic relationships for the psychological interest of it. People like that, who don't genuinely believe Gryles was ever real, are totally fine! They're not doing anything wrong. Sure, it makes me uncomfortable, and I won't read it, but at least they know where the boundary lies between finding a pairing interesting in a storytelling way vs. finding an inappropriate relationship appealing in a real life setting.
Another point I want to mention is that not everyone's fictionalized ships match their genuine real life theories. My friend Katie (@prettystylinson) for example writes Ziall as a side ship in many of their fics, despite not shipping it in any real sense. In a theory sense, they believe Ziam is more likely to be real. This is a great example of finding a pairing interesting to explore fictionally, while also understanding what has more backed evidence for a theory.
I think the reason people get these two concepts confused in this fandom is because of how much overlap there appears to be. A lot of Larries who believe they are a real couple will write fanfic of them together in situations that most likely didn't happen, or they'll expand on situations that did happen that we only got a glimpse of.
But it's important to separate fiction from reality here. Somebody writing fic of a ship they genuinely believe is real does not mean that everything they write is something they believe actually happened. In the reverse sense, someone might believe in a ship genuinely while never writing about it and instead choosing to write something else for the fun of it.
Even Larry fics that are canon-compliant are still fictionalized portrayals of a real couple, the same way you could write canon-compliant fic of, say, Barack and Michelle Obama, and even though a real couple is involved, the fic itself is a headcanoned portrayal.
My point in making this post is not to establish any sort of superiority between headcanoned ships and theorized ships, but rather to highlight the reasons they are different and what makes certain theorized ships okay and other ones not okay, as opposed to headcanoned ships where it's a total free for all.
I hope this explains my point adequately and if anything is confusing or there's additional points I've missed, please do add to this discussion! It's definitely very nuanced and complex, and one post could never cover all of it.