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As a project grows, a large context file (e.g., `claude.md`) can cause hallucinations and token waste. To solve this, create smaller, feature-specific context files and link to them from a master file. This keeps the active context lean, focused, and more accurate.

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To prevent context overload as your foundational layer grows, each file should include a header that tells an AI skill when to use it. The skill then scans and loads only the relevant files for a given task. This ensures the AI has the right context without getting confused by irrelevant information.

Avoid creating a single, massive context document that quickly becomes stale. Instead, maintain 3-5 small, focused, and dated files on specific topics (e.g., team, product). Treat context as an ongoing practice of curation: whenever you re-explain something to the AI, it should be added to a context file.

A project-level instruction file serves as a central 'router' for your AI system. It briefs the AI on folder structure, context file routing (what information to use for which task), and tool routing (e.g., 'always use Ahrefs for competitive data'), ensuring consistent and predictable behavior.

Counterintuitively, the goal of Claude's `.clodmd` files is not to load maximum data, but to create lean indexes. This guides the AI agent to load only the most relevant context for a query, preserving its limited "thinking room" and preventing overload.

Structure AI context into three layers: a short global file for universal preferences, project-specific files for domain rules, and an indexed library of modular context files (e.g., business details) that the AI only loads when relevant, preventing context window bloat.

Instead of one large context file, create a library of small, specific files (e.g., for different products or writing styles). An index file then guides the LLM to load only the relevant documents for a given task, improving accuracy, reducing noise, and allowing for 'lazy' prompting.

Putting all instructions in a single `claude.md` file is inefficient. Instead, use the main file to act as a router, containing only high-level instructions on where to find specific knowledge (e.g., in `marketing_rules.md`). This keeps prompts efficient and scalable.

To keep your AI agent efficient, differentiate between global and project-level skills and context files. General-purpose tools, like a text truncation skill, should be global. Specific processes, like a referral template, should be kept at the project level to avoid cluttering every interaction.

Instead of overloading the context window, encapsulate deep domain knowledge into "skill" files. Claude Code can then intelligently pull in this information "just-in-time" when it needs to perform a specific task, like following a complex architectural pattern.

A developer learned a key technique from his own site's community: compiling all project decisions, constraints, and background info into a single context file. Including this file with every prompt ensures the AI has consistent, accurate information, improving efficiency and reducing incorrect outputs.

Prevent AI Coder Hallucinations by Modularizing Project Context Files | RiffOn