The ACT focuses on concrete content rather than more abstract skills. This means that you need to know the specific information it is asking you rather than have more broad-based critical-thinking skills. Therefore if you are extremely good at processing and synthesizing information, but have not been exposed to the particular information being tested, your ACT score is not going to be a very good indicator of your intelligence.
The ACT has a lot of questions but only gives you three hours to answer them. This means that you don't just need to have the knowledge base; you also need to have the ability to access knowledge quickly. If you are a slower, more methodical thinker this could work to your disadvantage, particularly because blank answers are considered incorrect answers. The results of the ACT, then, could be more indicative of your ability to answer questions fast rather than your ability in general.
The ACT does not penalize you for wrong answers. Rather, it just gives you a score based on how many right answers you got; leaving a question blank and answering incorrectly are the same thing. This encourages you to guess on questions you don't know the answer to, which can generate an inaccurate result. While this may seem like a positive aspect, it is in fact a negative one, as your score will be compared with other people's scores. If another student is more adept at guessing than you, he will seem better prepared for college, even though the reality may be that you are equally well prepared.
When college admissions boards review SAT scores, they often choose the best results from the test, assuming you took it more than once. If you scored extremely well on the reading section but poorly on the math section, then took the test again and had the opposite result, college admissions boards would look at two strong results rather than two strong and two weak results.
College admissions boards don't allow this kind of latitude for the ACT. Rather, they look at each time you took the test as a distinct event. They do not choose the best parts of a set of tests, so you need to score well on every section on one day rather than repeating the test to improve how your overall performance is viewed.