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I want to know how SharePoint is handling list view threshold. Why limit is 5000, how to handle list view threshold?

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I understand when viewing a SharePoint Online list, an error indicates that the number of items in this list exceeds the list view threshold.

For on-premise SharePoint, the list view limit can be set on the Resource Throttling page in Central Administration, just as you mentioned. However, for SharePoint Online, the list view threshold is 5,000 which cannot be modified.

Currently, there are two workarounds which you can refer to:

  1. Split the items into multiple lists so that no list exceeds 5,000 items. For more detailed information, you can refer to this article: https://support.microsoft.com/en-us/kb/2759051

  2. Create more views and sync the items to different views.

Create, modify, or delete a view Manage lists and libraries with many items

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