Has the step counter been recalibrated with iPhone 7 or iOS 10? I walk the same route to work each day, however I have noticed that recently I am doing 500 - 1000 steps less each journey. This is an upto 25% difference.

I haven't noticed at what point the this happened, and if it was gradual, but it is certain;y lower since upgrading from my iPhone 6 on iOS 9 to an iPhone 7 on iOS 10.

I am walking the same route, wearing the same shoes and keep my iPhone in the same pocket. Have I lost these 1000 steps, or was it over-reading before?
The motion coprocessor is a different version in the iPhone 7.

Embedded within the A10 chip, there is another chip, called the motion coprocessor, M10. The new version of the coprocessor is likely to account for these errors in step counting.

In addition, this step counting is really only supposed to be an estimate. If you want an actually somewhat accurate step tracking solution, you should go for a dedicated wearable device, like a FitBit or Apple Watch. 

The motion coprocessor is simply a gimmick to match competitors' phones.