Is a Garage considered a 'Dwelling' for standalone electric service?
310.15(B)(7) relates to a weird exception in how wiring is done.  

The jurisdiction of NEC normally ends at a specific demarcation point, e.g. the meter.  Beyond that, the installation is under power company Codes -- I believe IEEE's National Electric Safety Code (NESC). That Code is built around different assumptions applicable to power companies: 


The wires will be outdoors or underground
Given the outdoor-scale distances, cost of wire matters a lot 
The wires will be out of contact of humans or structures, so they can run hotter
Whole neighborhoods don't peak at once, so wires can be significantly oversubscribed
System monitoring equipment will warn when those assumptions are wrong 


As such, they are allowed to use thinner wire.  However sometimes situations arise where outdoor wiring looks, walks and quacks like power company wiring that would be subject to NESC, but has landed in NEC jurisdiction because of a technicality.  An example is rural Texas where the PoCo slaps a meter at the edge of your property and leaves it to you to provide your own service drop/lateral.  It would be prohibitive to make, say, a 500' run using wire out of the usual 310.15(B)(16) (formerly known as 310.16) table.    So NEC 310.15(B)(7) and accompanying Code allows you to use wire sizes more like what NESC would recommend in that instance.