This proverb really explains a lot about Japanese society.  Namely, that it’s best to keep your head down, toe the line, and not make waves, lest you be hammered back into your “place” by society.

The phrase is sometimes rendered with the character 釘 (nail/peg) instead of 杭 (peg/post).  From what I’ve been able to tell in my research, the use of 釘 is incorrect, but that doesn’t stop people from using it.