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I guess my concern is whether someone at a port can stop a shipment THROUGH that port, based on the say-so of someone else. I know that there are limits on shipping dangerous goods, such as UPS/FedEx will not except certain items, but if the item in question is not dangerous BY ITSELF, what are the limits?

Customs always has the final say in my country. They will alert the relevant department in my case the DTI which states what goods can be exported and imported including what countries are acceptable to buy and sell certain items to and from. You may be able to sell the same goods to one country but not to another.

The example I have is that my goods were in a container going to China. I kept getting excuses why my shipment had not sailed. Finally I was told that customs were not happy with someone else's shipment in the same container.

The next I knew was that the Department of Trade and Industry (DTI) had seized the container. The problem and I never did find out what happened was that someone was sending protective clothing to China. This was suspicious as China makes most of the protective clothing we use so why buy from us. Customs/DTI thought it might be special nuclear wear and were unhappy that it might find its way to Iran from China.

... if the item in question is not dangerous BY ITSELF, what are the limits?

Legal limits are pretty well defined by export restriction, import restriction, and authorities of the people making the request and enforcinig the request.

The "66 switches" story has many facts in the public domain - and may or may not reflect badly on the UAE (although my initial impression is to think it does not reflect badly on the UEA, and CERTAINLY not on DPW - DPW didn't handle the shipment).