You should sit down long beforehand with both parties involved and get some ground rules established. All the factors need to be discussed; from family size to geography to who is paying for the wedding - get it all out in the open. As in, "Look we´re going to have 200 people, we´re not going to give them dinner, it is going to be a cocktail party. 125 come from the bride´s side, 75 come from the groom´s side." If that´s understood right at the beginning, and then the groom´s family wants a few more, you´ve got a basis to work from.
Invite those closest to you within your budgeted amount of people. Some people get carried away and invite everyone they know to their wedding. I´ve found the most enjoyable weddings are the ones that have the people closest to them. One couple I know only invited guests they BOTH knew. It kept their parents from inviting strangers to their wedding and they were surrounded by everyone they loved on their special wedding day.
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