How is Maximum Take Off Weight determined?
Pilots do not determine the official MTOW of an aircraft. MTOW will be estimated by the manufacturer during the design of the aircraft based on the required payload of the aircraft and the design configuration. It will be adjusted based on the detail design of the aircraft to comply with regulation requirements.


  §25.1533   Additional operating limitations.
  
  (a) Additional operating limitations must be established as follows:
  
  (1) The maximum takeoff weights must be established as the weights at
  which compliance is shown with the applicable provisions of this part
  (including the takeoff climb provisions of §25.121(a) through (c), for
  altitudes and ambient temperatures).


MTOW affects many other aspects of an aircraft's performance. It will affect stopping distance after a rejected takeoff, takeoff performance (including engine failure), climb performance, taxi weights, and many structural aspects. MTOW will be chosen so that the requirements for all of these conditions are met. This is why new engines or winglets which improve performance will allow a higher MTOW.

Of course, as always, the pilot has the authority to set their own personal MTOW more conservatively, if they feel it is necessary for safer operation of the aircraft.