It's very popular to rate things: movies, books, hotels, restaurants, etc. To rate is to give an opinion on quality, to evaluate. A lot of websites allow users to post their ratings, and these are often represented with stars.
If something is overrated, it means that people give it an evaluation which is too high. If something is underrated, the evaluation is too low.
In my opinion, new restaurants are often overrated. People write and post reviews with a lot of stars simply because a place is new. On the other hand, some movies are definitely underrated: they receive bad or so-so reviews, and then people don't see them.
A concept or idea can also be overrated. Ideas come and go, and sometimes they're in fashion for a while, until people feel that they're overrated, or proven to be untrue or useless.
Have you noticed anything overrated or underrated lately?