i also dont believe in buying a fish unless you have the room for it. saying oh it will be fine in this 20 gal because i am getting a 200 gal is not ok. now if you had this 200 gal and wanted to grow it out in a smaller tank thats fine.
How are these two concepts different? If I keep a fish in a 20g growout tank for a few weeks while the other larger tank sits empty, how is that any different from keeping the same fish in a growout tank for a few weeks until I BUY a larger tank? Obviously, since I'm using a growout tank in this hypothetical situation, I'm not putting a fish in there that's too large for the tank. No half grown arowanas or things of that nature. I'm talking about buying juvenile fish that have the potential to get larger.....like a 2 inch oscar or a 3 or 4 inch siver arowana. Use your imagination to pick a fish of a reasonable size for the tank knowing that it WILL be moved.
Maybe I'm assuming too many people will follow through with the purchase of a larger tank. I don't know. But, if they're even familiar with the concept of a growout tank, can't you assume that they're intentions to move a fish to a larger tank are indeed genuine and that they WILL follow through?
Now, if someone has 10 6 inch fish in a 10 gallon and they get berated for it and then counter with, "Oh, I'm getting a 1 million gallon tank next week" you know they're full of crap. However, if someone says that they've got a 2 or 3 inch juvenile oscar in a 20 gallon and they have to wait a few weeks to get a larger tank, I'm inclined to believe that they're going to get that tank. You just have to look at the situation and go by whatever info they give you.
As for the orginal topic, I go by number of fish occupying each "niche" in the tank, ability to maintain perfect water params with a normal water change schedule (one pwc a week or every 2 weeks), and presentation of "normal" behavior, which I guess means that I also consider the needs of individual species in the stocking level. If you have fish that are likely to be aggressive in confined spaces and they show that behavior then you're overstocked with regards to that fish. If your fish needs a lot of open space to swim, be it on the bottom or in the water column, and you have a whole bunch of obstacles or other fish in the way then you're overstocked.
I guess if you're overstocked your fish are going to be the ones that let you know. You just have to know what signs to look for. Of course, that doesn't preclude you from using common sense.........that's a lot to ask of our species, I know.