preparation of reservation chart just four hours before actual departure of train

Why is it that the reservation chart of a train prepared just four hours before the actual departure of the train and not earlier than that? Is it because that the railway authorities wait till the final position emerges and try to allot waitlisted passengers under the same PNR seats as close to each other as possible?

yes this is correct.

More because there are quite a few seats used up in many quotas, the status of these is known only a few hours before, so thats one of the reasons.

.............and, the Bookings for a particular train is stopped four hours before the scheduled departure, whereas the Charts are finalised two to three hours before the departure of the train. Sometimes, due to certain unforeseen reasons, the Charts are finalised one hour before the scheduled departure of the train.
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One can book the ticket, till the Charting work is taken-up, which in fact, takes about 5-10 minutes, and then a command is given for printing of the Charts.
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Once this command given, we will get an indication that CHART IS PREPARED.
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Once the Charts come out, the E-Tickets cannot be cancelled "on-line".

Sorry to correct you VSP Sir, but it should have been 'Confirmed e-tickets' in the last line of your earlier post.

##I am sorry, Boss, whether it is confirmed or RAC, you cannot cancel it on-line after Charting and in any case, the Waitlisted E-Tickets get cancelled after Charting. Hence, I simply said "E-Tickets".

Okay!
Partially Waitlisted Ticket should then excluded here!

The entire reservation chrting ystem is flawed. At the last 2/3/4 hours, a wait listed passenger cannot make any alternative travel plan after transporting all luggage etc., to station.
Instead, if the charing is done 24 hours before and notified, it will be helpful to all. All vacant seats thereafter may be clearly notified and also sold by railways to those wait listed passengers who prefer to still take a chance, after the charting is done, even may be at a premium.This will effectively avoid over-crowding in reserved coaches.

4 hours is the cut-off time needed by VIPs to decide if they want to travel by a train. 1 hr to pack bags, 1 hr to have lunch/dinner, 1 hr to make phone calls to their bosses/subordinates at destination, 1 hr to reach the station. the charting cut-off is based on that timeline. if they have decided not to exercise their 'privilege', all mere mortals (aka indian citizens) should kiss their feet & hope to get some of the seats left vacant by them.