Why does caster sugar have to be in a cake?

Answer 1

The same way you use ordinary sugar - add it to the yeast. Castor sugar is just ordinary sugar but finer/smaller crystals.

Answer 2

Caster sugar has very fine crystals, without being so fine to the extent where it absorbs a lot of water (e.g like icing sugar; icing sugar absorbs a lot of liquid and tends to clump together, which would result in brick-like cakes if it were used for that purpose) . The fineness of crystal means that it does not result in a "granular" texture when eaten (unlike granulated sugar) and gives a "lightness" which helps baked goods to rise. The fineness also helps the sugar to not sink in runny batters; it will remain evenly distributed.

Having said that, granulated sugar does still work in baking if you have run out of caster sugar. It's just that caster is really the better option if it is available. But granulated is good for jams, a) it's cheaper, which is useful when using it in quantity, and b) supposedly it gives a "clearer" result than caster sugar.