clipped from: blogs.wsj.com   
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A map of the earthquake-affected region, with red representing the greatest intensity. (Courtesy U.S. Geological Survey)
“Whether it’s a magnitude of 7.5, 7.6, 7.7 is not nearly as important as the fact that it’s near a population,” David Wald, a seismologist with the U.S. Geological Survey’s National Earthquake Information Center in Golden, Colo.
The magnitude does, however, convey vital information about a quake. It indicates the size of the fault,
it indicates the amount of movement, called slip
These magnitude estimates are more properly called moment magnitude
To make its estimates, USGS relies on its stations and those from other countries that participate in the Global Seismographic Network.

“You could have a 6.8 magnitude earthquake in the wrong place and suffer extreme damage,” Dr. Wald said. “When you have a larger earthquake, though, you increase the odds [of significant damage].”