Overbooking happens when the same room is sold twice. For independent properties it is most often accidental: a room booked on one channel is not closed off on another fast enough, so it sells again. It forces an unhappy choice — turn a guest away or 'walk' them to another property at the hotel's cost.
The risk grows with the number of channels a property sells on. Keeping availability in sync — manually with a couple of channels, or with a channel manager at higher volume — is how overbooking is prevented.
Why it matters for direct booking
A direct booking website is a channel you control directly, so a booking there updates your own availability immediately. The more of your demand you convert on your own site, the fewer moving parts there are to overbook across.