Squash string tension refers to how how tightly your racket is strung. Think of your racket face as a trampoline. When the ball makes contact with the string bed, it pushes into the racket face, causing the strings to stretch. Looser strings have more elasticity and tend to stretch more while tighter strings are already stretched, so will stretch less on contact. Using Newton’s third law, every action has an equal and opposite reaction, the string bed trampoline will push the ball forward with the same kinetic energy accumulated in the stretched strings.
Put simply, looser strings: more stretch, more power. Tighter strings, less stretch, less power. Want to know about the best squash strings? Check out this article.

String Tension: Power v.s. Control
Unfortunately, there is always a trade-off between power and control. When the tension is low and strings are stretchy, the ball will be flying off your racket, making it difficult to control. You would need very soft hands to keep your drop shots low and short, and develop a good feel for your racket face while playing lobs to keep the ball in court. Driving and hard hitting would be a lot of fun though once you optimize your swing.
With tighter strings, you will feel more control of your shots. You can feel your strings cut against the ball, giving you better touch and a fraction of a millisecond more time to put direction into your shot. Unless you are very strong player and hard hitter, you will certainly feel that you have to put more effort into your swing in order to get the satisfying WAPAH!! sound when you hit a clean hard drive.
how much tension is loose, normal or tight?
The standard tension on a squash racket is 25 pounds (25 lbs). Most factory strung rackets come at a slightly higher tension to account for the relaxation of a the string during transportation, storage and sitting on shelves. Most people who are very picky about their strings tend to replace these immediately anyways.
Anything above 25 lbs is considered high tension. 26-27 lbs is slightly high while 28-29 lbs is very high. Anything more and your strings could snap, racket could break, and you wont get much power. Mohamed El Shorbagy likes his racket at 27lbs. It makes sense for him since he has a killer forearm anyways and wont miss out on any power.
Anything below 25 lbs is lower tension. The range in low tensions is endless and varies from player to player. I usually play at 24-25lbs, and have seen many people play with 22lbs, 18 lbs, 19 lbs etc. Gregory Gaultier is rumored to use as low as 15 lbs of tension. That explains his strings comically exploding during a match with Golan.

I am comfortable with 24 lbs tension. I get good power and control, and less breakage compared to when I play at 25 lbs or higher.
Bonus Material
Can you use basketball shoes for squash?