The power amp section is controlling a lot of current, so even with reasonably low resistance in the wiring you still have a measurable voltage drop proportional to current x resistance. If that current from the power amp flows along a path which is used as a reference by the preamp section then the preamp circuitry has no way to distinguish a change in the input signal from a change in the reference point. Besides looking like a change in gain with signal level (i.e. distortion) there is also a path delay, so you get a feedback path from output stage to input stage that can cause oscillations.