Earthworms need organic matter to feed on, but the presence of castings (what worm poop is called) simply means those that are present are feeding. If the soil was too wet, saturated with water, the worms themselves would be crawling around on the surface.
Keep in mind that earthworms are one of the signs of a good healthy soil, a good population of numerous other small critters, Millipedes, Pill Bugs, Sow bugs, Ants, Earwigs, etc. is also an indication.

About the little piles of dirt in the lawn, does this mean it is too wet? I only water twice a week, and skip it if it rains.

The little piles of dirt are castings - worm poop. This is a very nutrient rich material and can cause issues with burning if the lawn is not thick and otherwise healthy And they can look unslightly. If there are lots - and yes, it has to do with soil moisture - best to rake them to evenly distribute this natural fertilizer across the lawn.

Visual piles of castings are typically produced in spring and fall when rainfall is plentiful and the soil under the lawn is quite moist. This means the worms are coming up to surface. You may want to cut back on your watering slightly to allow the soil to dry out a bit between waterings. The worms will still be present and producing their castings -- they will just be under the soil surface where they do the most good.

Castings are good for the soil, you could put them back into the compost bin if you want. I recycle things like fallen leaves and plant trimmings.

Thanks. I'm happy to have the worms and don't mind little piles of worm poop on my lawn!

gardengal- you don't cut back on watering in So CA! You don't WATER in So CA! LOL We have a serious drought here in CA!
I'm in No CA and we also have a severe drought! I have a well, though, so I water as I want.
Due to a stupid casino going in less than 2 miles away, I have well monitoring, and my well is doing just fine (for now) Nancy

Some people, wrongly, advocate scooping those worms casting up and putting them in compost which can be a lot of unnecessary work. Leave worm castings on the soil where they are to feed to soil underneath. If you want to add castings to compost buy them.

We're still allowed to water 3 days a week. I only water the tiny lawn on two days, and I've removed most of my lawn.

nancyjane, the OP stated she waters twice a week. Depending on how that water is delivered and the duration, that may account for excessive moisture at the soil surface, creating an atmosphere that is attracting the worms to the surface as well.

Typically, it is recommended to water less frequently but for a longer duration. That allows the water to penetrate deeper into the soil profile but results in less moisture accumulation at the soil surface. It also results in healthier, more drought tolerant lawn that requires less water.

gardengal, being in the PNW, have you ever even thought of a drought? ;)
So Ca is like a desert, less than 10" per year in a normal year!
Here in No CA (North of SF) we are used to 35" during an average year, and have been getting less than 20" the last 3 years! Nancy

While it can take some time those in drought stricken California can help conserve even more water by adding more organic matter to the soil. Adequate levels of organic matter can help keep moisture in the plants root zone, whether the soil is clay, sand, or something else.
People in those areas do need to pay attention to what they are permitted to do, water once a week (better) for a longer time or more often for a shorter (not as good) period of time.

nancyjane, I think we are talking at cross purposes. I am well aware that CA is experiencing an extended drought (I visit often. And PNW or not, much of western WA is a recurring summer drought area). But drought has nothing to do with watering practices.......except that it can make proper watering practices even more important.

Frequent short waterings - the way most have their automatic sprinkler systems programmed - tend to concentrate water only at the soil surface . This is not the best practice for the health of the lawn or other plants and it is what encourages any earthworms to the soil surface.

Less frequent watering but of longer duration allows the water to penetrate more deeply. And the plant roots follow the water down into the soil. Deeper root systems translate to increased drought tolerance. So watering less often is actually better all around.......you just need to make sure that when you DO water, it is for a long enough period of time for the water to percolate down deeply. So instead of the 2-3 times a week at 10 minutes, extend that to once a week for 20-30 minutes. Or longer. One thorough good soaking is far better than several light sprinkles.

I've got no arguments! I just always think of PNW as being soggy! LOL Nancy

Some of it is......parts of the Olympic rainforest get somewhere around 140" a year. But that's a pretty isolated situation. Most of the Puget Sound area gets much less - about the same as you get in NoCal in a normal year. In fact, Seattle gets less annual rainfall than any major city on the eastern seaboard......we even get less than Houston, TX and on average, are about tied with Dallas!

We just tend to get a little bit of rain over a long period of time. It seldom rains here like it does back east.......most of our rain is a misty drizzle that comes and goes pretty steadily from November to May. It just usually doesn't amount up to much. And then May through October is dry, often very dry, with usually no measurable precipitation from July though September.

Soggy?? I guess it depends on how you define it. Most PNW'ers don't think so :-)

Two years of single digit rain totals and 35 inches sounds downright dripping. Lol

A lawn, under moderate weather conditions, needs about 1 inch of water per week, vey few irrigation systems, used at homes, will deliver that amount in less then an hour so 20 to 30 minutes is not enough. If temperatures are above the mid 80's and it is quite sunny the lawn most likely will need more then that 1 inch of water per week.
Since each irrigation system is somewhat different the only way to know if that system is delivering enough water is to measure what is delivered, and at different times of day.