Wattage is power
When thinking about power supply wattage, you must remember that some manufacturers advertise a higher number of watts than the unit is capable of reliably supplying. In that case, what you see on the box will actually be its “peak output,” a figure that the power supply is technically capable of, but only for very short periods of time. If your system regularly demanded that amount of power, perhaps while playing a game, it would likely damage the PSU and eventually lead to failure.
The easiest way around this is to make sure you purchase a power supply with more than enough advertised wattage, so that you have a buffer of sorts to prevent stressing it too much. This is probably what most people do, rather than commit the time and effort to learn how to pick out the proper unit. Since you’re reading this, you’re already better than them! You know what they say...
What you should be looking for in a PSU’s specifications is its continuous power output, which can be provided safely for the lifetime of the part. Good quality power supplies will clearly display this on the label, or at least mention it in the manual somewhere. You might also take note of the conditions in which that output rating was determined. Some power supplies may be rated at room temperature (20-30 degrees Celsius), but once it’s installed in your computer, the air inside the case will undoubtedly be much warmer, perhaps around 40-50 degrees C.
Heat has a direct effect on how much power the unit is capable of providing, so if the temperature of the air in your case exceeds the power supply’s operating temperature range, you can expect its wattage to decrease. The technical term for this phenomenon is “derating,” and some manufacturers will mention it in the PSU specifications. Here’s an example of what a derating curve might look like if a power supply’s operating temperature range is between -20 and 50° C, with an automatic shut-off threshold at 80° C:
Wattage isn’t the only number you need to take into consideration when shopping for a PSU. You should also understand the different voltages applied to particular components, namely +3.3V, +5V, and +12V. You see, the power supply that you buy and install into your computer is itself comprised of multiple internal power supplies of various types, each with their own limitations as to how much juice they can provide. These limits are measured in amps and must be carefully considered when looking for a PSU capable of powering the various components in your system.