If the area of defective plaster is relatively small, 10 square feet or less, then the repair can easily be accomplished with original materials, basecoat plaster followed by a layer of finish plaster. However, if you need to do more extensive repairs, it will likely be faster to tear out the plaster, and put sheetrock over the exposed lath.

First, find and fix the water leak, or whatever else is causing the damage.

Unless you can get your hands on a copy of 'Plastering Skills' and have a decent source for materials forget the real stuff.
If the leak has been repaired and the top finish coat has come away from the base you can make repairs using either Easysand or Durabond. These are setting type join compounds ( a modern plaster with retarders already added).
The compound is mixed about as thick as peanut butter and can easily be applied with a plasterer's trowel for large areas.
For really large areas a darby can even be used.
Use at least 120 minute compound unless the repair is small.

Home Depot is now selling 210 min setting type compound. The highest set time for what Lowes sells is 90 min.

1/2" or 3/8" thick drywall will can usually be placed directly on the bare wood lath and patched.

Please don't replace with Drywall! You can save your old plaster and reattach it to the lath beneath without the waste.

Plaster has significantly different acoustic properties from drywall and makes the room more "live" feeling. Plus it keeps plaster out of landfills.

A complete tear out may cost much much more than repair. A family member of mine just recently paid $8k just to have a bonus room drywalled and insulated. This room was unfinished so there was not demo or trash removal to pay for.

You can't buy the craftsmanship that went into your walls today. It hardly exists anymore and, in this day and age, labor costs as much as or more than materials.

There are great ways to repair your plaster with a plaster adhesive.

This Old House covers the topic, too.

Here is a link that might be useful: plaster adhesive

If the plaster is only loose and dammaged you can re-attach it.

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