Guilt refers to a feeling of having done something bad or a perception that you did something wrong. Guilt by association means that you personally didn't really do something wrong but that people who you are associated with did. You are judged by the company you keep, so you can be viewed as guilty because of your association with wrongdoers.
Guilt by Association Situations
There are many examples of guilt by association including:
Having close family members who are in a terrorist organization and thus being thought of by everyone to also be a part of the terrorist organization.
Having a lot of friends who cheat on their spouses and thus having your spouse fear that you will also be a cheater just like your friends.
Hanging out with troublemakers who never do their homework and thus being disliked by your teacher because of who your friends are even though you tend to do OK in school and do your homework.
Not standing up to speak out against an unpopular political idea with all detractors and thus being considered a part of that political group even though you aren't really a part of it.
Going out to the back of the schoolyard to smoke with your friends even though you don't smoke and then getting in trouble when they do just because you are out there.
Being a part of a gang of people that commit thefts and being viewed as a thief even if you do not actually go out and commit any crimes yourself.
Having a lot of friends who speak out in a prejudiced way and not distancing yourself from their statements so you are thought to be prejudiced as well.
Spending a large portion of your day at work with slackers who do not do what the boss asks them to do and then being disliked by your boss because you are friends with the slackers even though you do your work.
Being a part of an unpopular religion that advocates violence and thus being viewed as violent yourself even though you personally do not have any violent tendencies or desires.
Viewing someone who is part of the school band as a nerd because you think that most people on the school band are nerds even if they aren't and even if that particular individual is not a nerd at all.
Being on the football team and being considered a bully and a dumb jock as a result even though you are really a very nice and very smart person and not a bully at all.
Viewing a criminal defense lawyer as an evil and dishonest criminal himself because he defends criminals as a living, even if he is just doing his job and has never actually done anything wrong or broken any laws.
Viewing someone as dishonest simply because he is a politician and you believe that all politicians are dishonest even if the individual politician isn't bad.
These are all examples of guilt by association. Any situation in which the perception of a person or idea is colored by the company he keeps or by the source of the idea is an example of guilt by association.