As someone who loves to shoot portraits, I am aware that the sight of my camera will usually cause people to lose their "natural" look. So whenever I can, I try to shoot more candid images. I prefer them over more formal portraits. To make your candid (sometimes called informal) portraits look better, you want the subject to ignore the camera or, better yet, not even see it. If you can keep your camera movement minimized or unnoticed, you can get relaxed expressions that you rarely get in a posed portrait. We're not talking about something unsavory here, so please, don't take my suggestions that way. No one I shoot with is interested in those kinds of things. First, you need to make sure you always have a camera with you. It certainly doesn't have to be a fancy DSLR; any camera is better than no camera. My Nikon point-and-shoot will fit into a shirt pocket and shoots RAW for maximum flexibility in post-processing. People who know me are used to me taking their photo and are relaxed when I take it out. Heck, they expect me to have a camera and are surprised when I don't have one.
Set your camera to the fastest shutter speed to maximize your chances, and try to plan the shot before you lift the camera. Longer lenses allow you to stand back, so you don't encroach into their personal space. Don't use flash if you can avoid it; flash will kill any relaxed moods.
In my experience, men seem to be the most uncomfortable around a photographer, so be ready for their uneasiness. Although people respond to cameras in different ways, they always respond. Even for the simple snapshot below, the viewer instantly can sense a pose. Tina knew I was there to take her picture, and though she is always smiling, she smiled extra big for the camera.
There are several ways to get your subjects to disregard the camera for a better candid portrait. My favorite method is to ask questions. In this picture, we came upon a vendor at her shop during a photowalk. She was surrounded by several photographers and very aware of our gear. She gave her permission for some photos, but really didn't know how to react. When I asked about her daughter, she relaxed and looked down at her with a mother's love. Her face instantly relaxed, and, for a second or two, she forgot that she was surrounded by cameras. You have to be prepared to shoot because her facial expression changed when she heard the shutter firing. It's just a natural reaction for people to feel self-conscious when a camera is pointed in their direction.
For older folk, I let them tell me stories about the past. Here, Carl (92) was telling me about his sewing machine store in central Wisconsin. He'd been selling and repairing sewing machines for decades. After a few introductory shots, I put my camera down and just listened. As he got into his remembrances, the camera was no longer an issue. I got about a dozen photos in between remembrances.
Children are really fun to photograph because they haven't learned to worry about someone taking their picture. If you let them see the camera, mug for a few snaps, and let them see the results, they'll go back to playing and ignore the camera completely. They have more important things to tend to, like finding the perfect pumpkin. I've mentioned before that kids are my favorite subjects. They provide plenty of natural expressions that change in nanoseconds. We've said this before: take lots of shots. This applies especially to children, but apply the rule across all your people shots.
If you use long lenses, you can take candid photos before someone notices you. This policeman in Aruba had no idea, he was having his photo taken until I walked up and showed it to him. I correctly assumed that, since his post was near the tour boat docks, he was used to crazy tourists with cameras. You should be cautious with this approach, however, as you don't want to create any kind of uproar. It will not help your cause to upset your "models." I asked him for his permission to use it and offered to send him a copy. I think I get their approval more than 90% of the time and usually take several more with them aware. If they don't want me to take their photo, I'll erase it and show them that the photo is gone. In this country, you can legally take photos of anyone in a public place, but why push the issue if it's going to upset someone? You risk creating a bad impression of you (not good for business) and can ruin it for other photographers. I'm not out there to upset anyone.
Candid portraits are fun and a handy technique to practice. As always, knowing your craft is important, but this is a time to concentrate more on spontaneity rather than technique. By taking candid photos, you can create images that capture a moment in time, with a subject who doesn't look like they're posing. These pictures can become treasures if you know how to capture them.