Pop cap too low?

[Cadaverous_Fly]

I'm a newb who has some questions about the continent pop cap. I know you can only have 166 people from your empire on a cont but how do they prevent you from going on a continent with too many people will your galaxy crash? will the warpgate not work? Also do people frequently hit the pop cap? Does it negatively affect gameplay or is the pop cap right?

pop=population
cap capacity

*gasp*!