An overstatement is an exaggeration, like when you make the ridiculous overstatement, "You should've seen the fish I caught — it was as big as my leg!"
Everyone makes overstatements sometimes, especially when they want to emphasize something's importance or impressiveness. A politician's overstatement about a city's crime rate is calculated to make people worry, and ultimately, to make them vote for him. Your overstatement about how much homework you have may get you out of doing the dishes after dinner. Learning this word will improve your vocabulary by 100 percent — although that may be a slight overstatement.