As has been stated repeatedly, it's based on server population at the time you try to create a character, which means the notice of server restrictions on the Lodestone is almost always out of date even before the page has finished updating - the servers can only handle a certain amount of players logged in at any one time and because Balmung is a 'Legacy' server from the original version of the game, and has always had a high population (in 1.0's days it became the unofficial 'roleplay' server so players who like to RP moved there), it's therefore naturally one of the hardest servers to create a character on.

And expanding servers doesn't necessarily help, because people prefer to stick with the server they have, especially if they're on Balmung. There is no easy solution to this sadly - all you can do is just try to create a character at a quiet time (like, early morning) when the server's population would be less, or keep trying to create a character and eventually you should be able to get on (as you can save creation data it's not like you have to restart character creation from scratch every time you do so).