Birds fluff their feathers for a few different reasons:

• Sometimes a quick full body fluff accompanied by a wag of the tail feathers is a greeting or a sign of happiness.
• When a bird is sleeping and they are fluffed up it is a sign of relaxation and also a means of regulating their body temperature.
• If a bird is fluffed up for prolonged periods during the day this could be an indication that the house is too cold. 

BUT, this is IMPORTANT!

A bird who sits puffed up much of the day when they are typically very active is likely not well.  If they are also exhibiting signs like poor posture, lethargy, strained breathing or lack of appetite do not delay. They should be taken to an Avian Veterinarian as soon as possible. Due to their strong survival instincts, birds often pretend to be fine when someone is watching nearby so observe very carefully.