I think the word "teacup" has come to mean "smaller than average". I don't think anyone will jump at your throat about it if you aren't going to put that word in front of "Yorkie" and try to sell it for 5 billion dollars. I'm only against the word "teacup" if a irreputable breeder tries to make a pretty penny off of the word. Fred is smaller than I thought in size and I just call him mutant, runt, rat or teeny tot. But, that's just me trying to be funny and I doubt Fred understands enough to get his feelings hurt.
From reading these threads, a lot of people like to keep the smaller ones but if they cannot keep them, they sell them with limited registration just to prevent the small dog from being bred. But, I'm no breeder so I might not be of any help!