I consider the general impression of public and critics. I can't label underrated a 90 Metacritic game that sold 8 million copies, a game that when I ask people about they go crazy in excitement. The game is loved and successful, it's not underrated.
God Hand received countless mediocre reviews when it was released (including 3.0/10 from IGN) and received horrible word of mouth publicity because of sloppy presentation and insane difficulty. Except it's a very very niche game that does the hardcore brawler thing like no other. This game would never sell 10 million copies because most people don't bother procuring beyond what they hear. And what they hear is that this game is too hard and looks like crap. So it's definitely underrated.
Now, a game like Okami can't be considered underrated, because it got raved by every single person who's played or reviewed it... the 12 of 'em anyway. People only have positive things to say about it. This game had everything to sell zillions of copies. It's just overlooked, like Eternal Darkness.
Of course it's mostly opinion anyway, if you dislike Eternal Darkness you probably consider it overrated... but I try to look at the game for what it is. I can't bring myself to play Guitar Hero for instance, but they're well made games. I can't say they're overrated just because they're not my type.
Just my view on the thing anyway.