An alignment tolerance allows the alignment to be within an acceptable range of misalignment that does not affect the machine's ability to rotate properly.
Misalignment is the deviation of relative shaft position from a collinear axis of rotation, measured at the points of power transmission, when the equipment is running at normal operating conditions.
A good rule of thumb for general purpose equipment (3600 rpms and less) is .0005" (1/2 thousandth) per inch of coupling span.
This tolerance uses only speed and coupling span. Other factors to consider are: How critical is the equipment, mechanical stiffness, the excitation forces influencing the rotor dynamics, etc. This is where knowing your equipment is essential.