Message "Overpopulated" on character selection screen indicates that world is overpopulated at the moment and cannot accept new players.
This situation occurs when approximately 3 000 - 3 500 characters are online.
Our goal is fit 10 000 online characters on a single world at the same time before the end of Early Access and we are working on resolving issues and bugs which are preventing us from reaching it at the moment.
We would like to indicate that during closed beta - worlds had issues supporting 200 players at the same time and we have made significant improvements in a few month allowing us to fit 3 000 - 3 500 characters at the same time on one world.
You can attempt to login later or use different characters to play on another world (Newbie Island, etc.)
Thank you for your patience and understanding!