Using new Hubble Space Telescope Faint Object Spectrograph , New Technology Telescope EMMI , and Keck HIRES spectra of the gravitationally-lensed double QSO HE 1104–1805 AB ( z _ { em } = 2.31 ) , and assuming UV photoionization by a metagalactic radiation field , we derive physical conditions ( ionization levels , metal abundances and cloud sizes along the lines of sight ) in five C iv +Mg ii absorption systems clustered around z = 1.66 along the two lines of sight . Three of these systems are associated with a damped Ly \alpha ( DLA ) system with log N ( H i ) = 20.85 , which is observed in the ultraviolet spectra of the bright QSO image ( A ) . The other two systems are associated with a Lyman-limit system with log N ( H i ) = 17.57 , seen in the fainter image ( B ) . The C iv and Mg ii line profiles in A resemble those in the B spectra , and span \Delta v \approx 360 km s ^ { -1 } . The angular separation \theta = 3.195 \arcsec between A and B corresponds to a transverse proper separation of S _ { \bot } = 8.3 h _ { 50 } ^ { -1 } kpc , for q _ { 0 } = 0.5 and a lens at z = 1 . Assuming that the relative metal abundances in these absorption systems are the same as observed in the DLA system , we find that the observed N ( C iv ) / N ( Mg ii ) ratios imply ionization parameters of \log \Gamma = -2.95 to -2.35 . Consequently , these clouds should be small ( 0.5–1.6 kpc with a hydrogen density n _ { H } \mathchar 0 \sim < 0.01 cm ^ { -3 } ) and relatively highly ionized . The absorption systems to B are found to have a metallicity 0.63 times lower than the metallicity of the gas giving rise to the DLA system , Z _ { DLA } \simeq 1 / 10 ~ { } Z _ { \odot } . We detect O vi at z = 1.66253 in both QSO spectra , but no associated N v . Our model calculations lead us to conclude that the C iv clouds should be surrounded by large ( \sim 100 kpc ) highly ionized low-density clouds ( n _ { H } \sim 10 ^ { -4 } cm ^ { -3 } ) , in which O vi , but only weak C iv absorption occurs . In this state , \log \Gamma \geq - 1.2 reproduces the observed ratio of N ( O vi ) / N ( N v ) > 60 . These results are discussed in view of the disk/halo and hierarchical structure formation models .