Yep, essentially. Mbuna are "harem" fish, meaning they need to be kept in groups. You can't pair these fish - 1 male and 1 female would likely end up with one dead female. Generally you need at least 1 male and 2 females, often more like 1 male, 3 or 4 females for some species because of aggression. So overstocking helps prevent serious aggression because instead of having one or two "targets" for an aggressive, dominant fish to pick on, there are a whole bunch of other fish...basically, they each get just a little bit of that aggression, not enough to really do damage or make life miserable, rather than one or two fish getting all of it and probably ending up beat to death.
It's still a matter of trial-and-error a lot of the time though. Simply overstocking with whatever species won't work...you have to research on what mbuna are compatable with what others, how many of each species, and kind of play around until you've got a mix that works well together.
As I said, overstocking to minimize aggression only works with mbuna and a couple other (namely African) species, because of their type of aggression. You certainly couldn't follow this logic with most other species.
