Other posts on this forum suggest that the pre 96 cars have real temperature gauge, unlike the later gauges which only show hot when something's gone wrong. I assume this applies to non turbo cars, my 94 turbo certainly has a real gauge, as does my friends 93 turbo.
The gauge normally sits at the 8 o'clock position (just below horizontal) unless you get stuck in traffic or it's a very hot day. The fan cuts in when the needle is a few millimetres short of the red (two speed fan, 94 car, others may be different). It sounds like your car is behaving similarly, just a bit lower than my description. This could be due to a bit of extra resistance in the circuit, possibly a dirty connector at the sensor. The sensor is at the back of the head. Take the connector off and make sure the contacts are clean, see if it makes any difference. Also, let the engine run until the fan cuts in, and tell us where the gauge needle is at that point. If it's not dirty contacts, then probably a new thermostat would be the next option, unless you've got access to temperature measuring equipment to measure the top hose or heater hose temperature.