A cockatiel's droppings is a combination of feces and urine. There are many reasons why your cockatiel might have loose droppings. Just like humans, cockatiels might have a day where they might have eaten too much of something that did not settle well with them, like fatty foods such as potato chips. One day of abnormal droppings (usually appearing too loose or liquid) is not typically an emergency, as long as your cockatiel still eating, drinking and acting normally.
If the loose droppings are occurring daily, your cockatiel might have a viral infection, or it might be allergic to a new treat or food. Cockatiels that are nesting or laying eggs, will have sometimes huge loose droppings.
"Stress, spicy foods and even certain household aerosols can give your cockatiel the 'runs'."
Cockatiels can become ill from some human bacteria. The bacteria E. coli is usually present in our digestive system, but it should not be in the digestive system of a cockatiel so make sure you wash your hands after using the bathroom and before handling your cockatiel and its food.
As always the information offered here is to provide guidance and is not intended to be a substitute for the good advice provided by your own avian vet. When in doubt always consult your own veterinarian.