Many good opinions and viewpoints have been presented above; however, there are only three basic and fundamental needs to be considered for any animal kept in captivity, so, in essence, the term "overstocking" can only be used technically in reference to:
(1) BIOLOGICAL NEEDS which, in the case of fish/aquatic invertebrates, deals purely with the biological load and balance of the aquarium system (which determines water quality), and can be dealt with to varying degrees of success by
(A)removing waste product buildup from the system entirely, as in more thorough filtration (protien skimmers, etc.) or a more intensive maintenance schedule, including larger, more frequent water changes and frequent cleaning of the filter(s),
(B) providing a larger base for waste processing organisms and/or machinery, such as using a larger filter, multiple filters, or by providing a heavier plant density to utilize (or "soak up") substances which are toxic and/or stressful to fish/fauna (Utilizing plants for this purpose also requires considering the plants' processing abilities which, in addition to the fish waste products we want them to deal with, are also dependent upon light level and duration, as well as CO2 availability during the photo-period, which extremes of either could be stressful to fish/fauna, thus defeating the purpose of using plants solely to deal with fauna waste products. Also, the aquarium may become "overstocked" with plants, themselves, if they compete with livestock for available oxygen at night, when plants also take up oxygen and release CO2--added surface agitation at night helps prevent this.),
(C) increasing the overall size of the system by using a hidden sump, so that while the display tank may be only 55 gallons, another 55 gallon tank hidden underneath (or a big, cheap plastic tub) will double the actual size of the system, thus doubling the number of potential inhabitants as well as the margin of safety before toxins reach stressful levels, whether this hidden sump contains filtration components or not (large public aquariums in coastal areas have historically used seawater pumped straight from the ocean, through their display tanks, then back out to sea, thus providing the potential for virtually unlimited stocking abilities as far as water quality is concerned, since they thus become, in actuality, a part of the entire oceanic ecosystem. Of course, with the increasing pollution of near-shore waters, I suspect this unfiltered approach will soon be a thing of the past.),
(D) increasing water surface turbulence, which results in a higher gas exchange between the water and air, meaning more oxygen is entering the water (benefiting fauna directly and increasing the potential activity of nitrifying bacteria), as well as more carbon dioxide leaving the water (which, adversely, reduces the benefits of using plants to handle bio-load), and also, to a lesser extent, the removal of Nitrogen from the system entirely.
These aspects only address the biological, physical well-being of the inhabitants, and are generally the only considerations given to fish/fauna that are intended for production purposes, such as live-animal marketing or as food sources, and in such cases are often held in tight balance--for cost/benefit purposes--just enough to prevent stress-related casualties or stunting. BUT, our fish are supposed to be our "pets", so a much larger margin of comfort (and safety) is presumed to be desired.
(2) BEHAVIORAL NEEDS of the inhabitants, such as:
(A) the physical properties of the habitat, as in: the similarity to the fauna's natural habitat that it has evolved to take advantage of and feel the least stressful in (or a similar approximation that fulfills the animals' preferences, such as a clear plastic or glass tube satisfying the inclinations of a black ghost fish to "hide", and thus making it more comfortable while still being visible),
(B) a large enough aquarium to allow territorial fish their own area, or else defined, visually separated areas in a smaller tank that serve the same purpose, assuming, of course, that the tank is large enough to accommodate the size of the fish, itself (This also includes the concept of using different species' natural inclination toward using different strata, or different micro-habitats within the aquarium, such as the African Butterfly Fish, Pantodon buchholzi, and the Kuhli-loach, Acanthophthalmus kuhlii, which, even though they may occupy the same 20 gallon aquarium, each may never know the other exists, because one incessantly hangs around at the water's surface, while the other is always either hiding underneath something or wriggling its way around the very bottom of the tank; I can't, under any stretch of the imagination, see them ever "crowding" one another.)
(C) a high female-to-male ratio for some species, so that one female isn't "worried to death" by the over-attentive male,
(D) appropriate spawning sites for those fish that are inclined to spawn (slate "walls", flowerpot "caves" sandy substrates, grass-like, large-leafed or floating plants, etc.), or
(E) simply enough cover (plants, rocks, caves, etc.) all around the aquarium so that shy, timid species feel comfortable enough to come out and show themselves (in good color) because they know there is always a hiding place nearby that they can dart into if the urge arises..
Often, especially in commercial enterprises, just the bare minimum is provided to cover the specific needs of a fish at specific times, such as bare-bottom tanks to make it easier to provide better water quality for discus, since their need for high water quality is stronger than their need for visual or structural "niceties", or for breeding tanks being bare, save for the bottoms covered with marbles for breeding egg-scattering species, or simply suspended "mops" for koi to lay their eggs in, or floating plants for live-bearer fry to hide in. Most quarantine or "hospital" tanks are relatively bare for sanitation's sake, with possibly just a few objects or hiding spots to reduce the fish's stress level. Such plain, basic setups are specific to their purpose and serve the faunas' over-riding needs at the time and are, in most hobbyists' eyes, only temporary and unsuitable for the long-term housing of animals which we portend to care about as pets.
(3) NUTRITIONAL NEEDS, the third main aspect of all pet-care, is only applicable to the concept of "overstocking" in the sense that in large groups of mixed species (or sometimes with just a few individuals of the same aggressive species), some animals may be "bullied" or just out-competed for available food when the "feeding frenzy" occurs, so in such a case, the aquarium could be said to be overstocked, even though this is more a case of "wrongly stocked", or mismatched tank mates, or it could even be as simple as not providing the proper variety of foods, such as both floating and sinking, to match each species' needs..
(4) The last criteria that could
be considered as a qualifier for a tank being "overstocked" has nothing to do with the tank's occupants, but deals solely with the ideas of man, and is simply the aesthetic factor, and, as long as the factors above have been properly addressed, this is purely subjective and a matter of preference for the individual's tastes. What some see as a wonderfully vibrant display of an uncountable school of guppies, others may see as a dreadful overpopulation explosion in a very limited space. (Personally, I can't say that I have ever seen a guppy that seemed in any way distressed by an extremely large crowd of its peers, unless it was a lone female in a tank full of persistent males, but this trait certainly doesn't extend to all species of fishes.)
Overall, almost any perception of a tank being regarded as "overstocked" can be argued against with regard to its purpose, and most situations where some would consider a tank to be "overstocked" are mitigated by the effort put forth to maintain a margin of environmental safety within the system and the mechanical methods employed to ensure that margin, how large of a safety margin the aquarist desires and thinks is appropriate, the inclinations and behaviors of the species within that system, and the personal opinion of what the aquarium owner thinks is visually appealing. From an ethical point of view, a tank is not "overstocked" unless the inhabitants of the tank are under stress of some type, be it environmental (water quality), behavioral (poorly chosen tank furnishings, ill-advised tank mates, not enough territory, a bad male/female ratio, etc.), or nutritional (not enough food provided to each occupant). Anything beyond those criteria is purely an opinion, and opinions are like as--...er...um....belly-buttons...yeah, that's it, "Opinions are like bellybuttons: everybody's got one."