Recursive in CakePHP allows you to control how deeply associated model data is retrieved. Setting the recursive level to 1 fetches data from directly associated models, while 2 fetches from models associated through another model. This helps control the amount of returned data by limiting the depth of associations included. The example shows authors, books, and readers models associated in a chain. Setting recursive to 1 returns authors and books, while 2 returns authors, books, and readers data.