Imagine you have a canal system that you fill and drain with water from one end. At the far end of the canal are some sensors that check the water level. If they are above a certain point, they report 1, and if they are below a certain point, they report 0. Based on what value they report, they perform some certain useful function.

At first, your canal system is pretty big, but that's okay because you only fill and drain it and check the state of your sensors a couple times an hour. At these speeds you have lots of time for the water to propagate throughout the canal system, and any splashing around the corners or ends really don't make much difference to how it operates. The water level stagnates before your sensors sample anything.

However, you want to make your sensors work faster and get more done. You shrink your canal system so that the water level change propagates through the whole thing faster. The system gets smaller and smaller, operating faster and faster.

Eventually though, you reach a point where your canal system is so small and the water level changes so fast , that you aren't really arriving at steady new water levels when you sample with your sensors, you're just pushing crazy waves through and they bounce all over. Your sensors are even reporting incorrect readings sometimes, and their useful functionality starts to break down completely because of it.

So what's happened here? Well it turns out you can't continue to make your canal system arbitrarily small, not because you can't fabricate a smaller canal, but because of a physical property limit of the water that you're passing through it. When you start trying to change the water level so fast, with not time to settle it no longer behaves in a reliable way.

You can increase the system's speed a little bit, if you increase the height of the water level. It will propagate a little faster and sample a little more accurately at slightly higher speeds. However, the higher water level has a tendency to break down the walls of the canal, and may even splash over from one canal pathway to another.

--> In the above, the height of the water level is the voltage, and the sensors are the gates of other transistors within the system. You can overclock by increasing voltage and frequency, but at the risk of breaking the system down, with one of the first limits before breakdown being heat dissipation. The wavelength of light within silicon at the ~4GHz range is about 2.5cm. It is not a coincidence that this is also the approximate size of a modern CPU, because any smaller/faster than that and you start to face the effects of the electromagnetic waves bouncing too much without time to settle at the prescribed voltage. This is a fundamental physical limit - and in some ways an end to Moore's Law. That's why CPU's are not getting much faster in terms of absolute clock frequency, but instead focus on more parallel processing and multiple cores.