Both phrases refer to problems resulting from urbanization that occurs too quickly, but different dimensions are stressed.
Pseudo-urbanisation is an example of the accumulation of urban elements by a place without meaningful structural change from rural to urban development. Population growth may be a result of migration or simply an administrative change in the status of rural localities, but employment, industry, infrastructure, and public services will inevitably remain insufficient. Thus, a large part of the population could engage in informal, low-productivity, or rural activities. Consequently, pseudo-urbanization can be defined as urbanization only in terms of population or appearance, but not from the economic or functional perspective.
On the contrary, over-urbanization is connected with the fact that urban population growth is beyond the potential of the urban economy and infrastructure to absorb such growth. Fast migration and natural population growth, as well as concentration of economic activities, lead to strain on housing, employment, transportation, water supply, sanitation, healthcare, and other services. This can result in the emergence of unemployment, slums, overcrowding, traffic jams, pollution, and insufficient vital services. Thus, pseudo-urbanization deals only with the lack of real urban transformation, whereas over-urbanization is about the degree or speed of urban growth.
In other words, one can say that pseudo-urbanization is “urban population without sufficient transformation,” while over-urbanization is defined as “urban population beyond spontaneous and economic capacity of the city.”
Readings:
Pseudo-Urbanisation: The Concept