Anthropic evolved Claude Code's context engineering from rigid rules to flexible judgment-based approaches. Key shifts include moving from strict guidelines to letting Claude make contextual decisions, replacing examples with better tool design, using progressive disclosure instead of front-loading all information, simplifying tool descriptions rather than repeating instructions, implementing auto-memory instead of manual saving, and enabling rich references beyond simple markdown files. The new approach emphasizes lightweight system prompts, focused CLAUDE.md files highlighting codebase gotchas, skills as specialized guides, and code-based references for clearer instructions.