Over Urbanisation is the situation when the growth of the number of urban inhabitants and expansion of urban areas happens too quickly compared to the growth of the number of work opportunities, development of infrastructure, housing, public services and economic opportunities of the urban area.
In other words:
Over-urbanisation is a situation where the number of people in cities is larger than the level that the existing urban economy and infrastructure can manage.
Main signs of over-urbanisation
Quickly growing urban population – urban population usually rises very sharply, mainly due to rural-urban migration.
Lack of work opportunities – the formal economy is not able to offer jobs to the growing labor force.
Expansion of the informal economy – street trade, casual work and other types of informal activities flourish.
Lack of housing – the cities experience housing shortages that come with the increase in slums and illegitimate settlements.
Increased pressure on infrastructure – water supply, sanitation, transport, electricity, healthcare become overstressed in urban areas.
Unemployment and underemployment – the growth of the population exceeds the capabilities of the economy with regard to the provision of decent jobs.
Environmental problems – the number of pollution, traffic jams, urban waste becomes higher while green spaces diminish.
Urban poverty and inequality – economic opportunities become distributed in an unequal way.

The concept of over-urbanisation is often applied to developing countries in the context of the occurrence of the urban growth without industrialisation. This is connected with the idea of “urbanisation without industrialisation”.
Example
A city can become a place of migration. Cities with the prospect of creating jobs can attract newcomers. If the speed of job creation, housing and infrastructure growth is lower than the population rise of the city, people can end up without jobs or having jobs they consider undesirable and living in inappropriate places.

Readings:

Urban Growth and Urbanisation: The Distinction, Concept and Similarities

Our Cities Hold the Key to Global Sustainability

We Will Have to Make Our Future Cities Both “Resilient” and “Sustainable”


Four Pillars of City Sustainability

Resilience of Cities
Urban Transformation : Ways of Sustainability for Cities Across the World


Tier Classification of Indian Cities and Fast Growing Urban Centres