I want to get the "low chaos" ending in my Dishonered playthrough. I know that killing enemies will count towards more chaos. Does possessing an enemy also count towards the chaos score?
No, possessing guards does not directly increase chaos, as long as the guard survives. If the guard is killed because of possessing him, e.g. falling off a ledge after the possession ends, that counts as a kill.
Chaos is caused by kills and certain quest/side-quest objectives in a dangerous and destructive way.