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Soundman did a great job explaining everything. But there are 2 small things I would like to correct just for the sake of anyone reading this thread in the future.
1.) The idea that 'speakers only take what they need' is a bit backwards. They are driven, by an amp of some kind, and thus are open to being given more juice than they can handle. Past that, the breakdown of what this does to the coil, speaker, and so on is very good. Just don't make the mistake of treating this like an electrical circuit where ratings are based on a component's draw. Speaker circuits do not work like this. I have seen many people through my career make this mistake and end up thinking the speakers were trash, when in reality they were just pushing too much juice into them over and over. They will take whatever you throw at them until they fail and short.
2.) Under-powering is okay only as long as there is no clipping. Clipping can just as easily destroy a speaker's cone or coil, as it's essentially a direct DC current sustained over time. Speakers work off AC, and that's why they vibrate. The constant reversal of polarity is what makes it move back and forth. Since clipping scenarios essentially provide straight DC current to the speakers, they stop vibrating and are stuck in a fully extended position until the clipping event is done. If you at any point experience clipping, you are risking your speakers damaging themselves from this over-extension that they are not designed to hold. Turn the volume down when you get this, and look to upgrade your amplifier to prevent it from clipping at higher volumes.
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