This isn't just a problem with women's jeans which have arbitrary size numbers. Even men's jeans which are size by the actual waist and inseam measurement can be wrong. In addition to vanity sizing, cheaper jeans are also made from larger material cuts out of the patterns at the same time to save manufacturing cost sometimes twice as many as shown here:
Those at the top or bottom of the stack may end up a bit smaller or a bit larger than the pattern, but they all get marked with the same size.
Whether it was this manufacturing problem or vanity sizing, this is why I stopped buying Old Navy jeans. I could pick out 3 jeans all labeled with the same size and one would fit okay, one would be too small, and one too large. I have never had this problem with Eddie Bauer jeans.
Edit: I found picture showing the larger stacks (which can introduce the mismatched sizing) I was referring to: