Overcrowding is the problem itself: the situation when too many people or too many things are packed into one place. Overcrowded describes the place; overcrowding names the state. You hear it about cities, classrooms, hospitals, animal shelters, and public transport. It is a little more formal than saying 'it is too full,' so news, reports, and school writing use it a lot — though people say it in speech too. It is a noun, so you talk about overcrowding, or the overcrowding in a place. Though actually, English speakers sometimes slide between the noun and the adjective, but in careful writing they are not the same job.