We normally use the word “congestion” when describing wireless traffic overload situations, but, when you get down into the networking nitty-gritty, congestion doesn’t really mean anything. The better term is “contention.” Packets must contend with each other for permission to send and receive during open opportunities, like gaps in traffic. Remember that Wi-Fi is a half-duplex technology, so at any given moment, only one device on a channel can transmit, either the AP or one of its clients. The more devices on a wireless LAN, the more important contention management becomes, as many clients compete for airtime.
Given the ever-increasing proliferation of Wi-Fi networks, exactly who gets to transmit, and when, is hugely important. There is only one rule: whoever talks into silence wins. If no one else is trying to transmit when you do, then you get to talk unhindered. But if two or more clients try to talk at the same time, you have a problem. It’s like talking to your buddy with a walkie-talkie. When you talk, your friend has to wait and listen. If you both try to talk at the same time, neither one of you will be heard. To communicate with each other effectively, the two of you must manage your airtime access and contention. This is why you say something like “over” when you’re done talking. You signal that the air is free for someone else to talk.
If you’ve ever taken walkie-talkies on a trip, you may have noticed there were only a few available channels—and lots of other people who had the same idea. Especially in the days before cheap cell phones, it felt like everybody was on walkie-talkies. You and your friend might not talk over each other, but that still left every other walkie-talkie user near you who happened to be using the same channel. Every time you wanted to get a word in, someone would already be on your channel, forcing you to wait...and wait...and wait.
This kind of interference is called “co-channel” interference, wherein interferers clog your channel. To get around the problem, you can try moving to another channel, but if nothing better is available, you're stuck with very, very slow communication speeds. You only get to transmit when all of those longwinded so-and-sos around you all have a rare moment of silence. You might only want to say one small thing, like “Holy cow, co-channel interference bites!” But you might have to wait 15 minutes for an opening in which make your quick, pithy statement.