Yes. That is how that works. If you have more allowances, you have less withheld and a lower refund (or possibly a higher tax due).
If you are sure that there will be no changes and ALL income is accounted for when having all the allowances, it will not be an issue. However, if you have two jobs or a married couple with 2 jobs and you both are taking multiple allowances, it is possible that too little will be withheld resulting in a tax due at the end of the year. So, be sure that you account for ALL income when filling out your W4 or state tax withholding form.
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