Octane rating is basically a measurement of the fuel's tolerance to spontaneous combustion. If you check the pump, you'll see RM2 after the rating. Root mean square. In other countries, they may use a different means for determining it. Lower octane fuel will pre-ignite within your combustion chamber due to many things. The most common two being carbon buildup that leaves "Hot spots" on the piston top or in the head around the valves, and high compression ratios. When you get past abut 9.5:1, or have a turbo or supercharger, it's possible for lower grade fuels to ignite before the spark plug fires. This pre-ignition is that knocking and pinging you hear when pushing a crappy old car up a hill with a load.

As far as too high, I think that's a matter of the higher octane fuels burning too hot. We use to run a mixture of 76 leaded (yummy!) and Avgas aviation fuel in our 1968 Camaro when we went racing. This was the cheaper version of 104+ octane boost. Not only do you get a more controlled burn, but since it's generating more power, you're getting much more heat. Is suppose if I wasn't on my way to work, I could provide a more detailed explanation, but I hope that helps.

By the way, unless the manufacturer calls for it, there's no benefit to running high octane fuel in a stock motor. Even a Corvette can run 87 on the freeway. Some engines have "Knock sensors" that will adjust the ignition timing to compensate for good or bad fuel quality.