You will see this message if the plan you are selecting does not include adequate resources and all the features that are already used in your account. For example the number of created DataPages, Account Users, API Profiles or the amount of Database Storage should not exceed the limits of the new plan.
In order to choose a plan smaller than what you currently have first bring your account within the limits of the new plan and then proceed with changing your plan. Many objects can be exported outside the account for future use.
Note that if you are using features such as image resizer, calculations, white labeling or distance search you may not receive any warning if the new plan does not include these features. They are removed from any application that is using them and potentially making them unusable.
Compare the current plans and their features and resources here.