The PIN diode-based N-bit reconfigurable retrodirective metasurface (N-bit RRDM) is a next-generation retro-reflector that offers the advantages of effective electronical control of the retro-reflection angle, low loss, and thin planar structure. However, since the unit cell of an N-bit RRDM is controlled by a quantized N-bit phase (360°/2<sup>N</sup>), it encounters operational errors, such as beam gain reduction and spurious beams. This can be a fatal disadvantage in military radar or satellite communication, which requires accurate beam tracking. This paper theoretically analyzes the operation of the N-bit RRDM by utilizing generalized Snell’s law and array factor theory. The analysis results present the design criteria for an N-bit RRDM that eliminates issues related to beam gain reduction and spurious beam errors. Furthermore, to verify the theoretical analysis results, High-Frequency Structure Simulator (HFSS) full-wave simulation and experimentation are conducted using the 1-bit RRDM.