Plasmid incompatibility occurs when plasmids share certain replication or partitioning mechanisms that are essential for their maintenance during cell division. Plasmid incompatibility occurs because when two plasmids compete for replication factors within a bacterial cell, the plasmids with growth advantages, such as quicker replication or lower toxicity, tend to dominate. This dominance happens because these plasmids can replicate more efficiently and outgrow other plasmids in the cell.