Laboratory synthesis of layered double hydroxides (LDH) often results in materials replete with stacking faults. Faults are known to affect several properties including sorption, electrochemical, and catalytic activity of this important class of materials. Understanding the occurrence of faults thus calls for a comprehensive analysis of formation and stability of ordered and faulted LDHs. High-temperature oxide melt solution calorimetric measurements made on an ordered and a faulted MgAl LDH with carbonate interlayer anion shows that ordered LDH is energetically more stable than the faulted one by similar to 6 kJ/mol. The stacking faults are an intergrowth of R-3(1) and H-2(1) polytypes, and faults could thus mediate transformation of 3R1 to 2H1 polytypes. Several factors including pH and temperature of precipitation also affect layer stacking. The formation of stacking faults could therefore have its origin in kinetics. Water content in the interlayer also affects layer stacking, and hence it may affect properties of LDH. Improved understanding of the distribution of water molecules in LDH is also crucial in an environmental context, as LDH occur as minerals and are important for contaminant amelioration in the environment. Water adsorption calorimetry on dehydrated LDH shows a continuous decrease in the magnitude of adsorption enthalpy with increasing coverage, indicating the presence of energetically heterogeneous sites where the water molecules reside. The results also indicate that the energy of several sites where the water molecules may reside (whether in the interlayer or on the surface) overlaps, and hence it is hard to differentiate among them.