Crowded, in a confined space, as in We could use a lot more room; this tiny office puts us at close quarters. This idiom makes figurative use of quarters in the sense of “military lodgings” but originated in 18th-century naval warfare. When the enemy boarded a ship, the crew would retreat behind wooden barriers erected for this purpose and would continue to fire through loopholes. They thus were very near the enemy, fightingin close quarters.
[ c. 1800