The sensitivity of the charmonium and bottomonium spectroscopy to the short distance part of the interquark potential is critically re-examined using the latest data. We confirm that the data cannot accommodate a QCD scale parameter (Ʌ(_MS)) smaller than about 150 MeV, whereas we find no constraint on larger values of the scale parameter, contrary to a previous analysis. The effects of dynamical heavy quark masses in the loop correction to the perturbative potential is studied in detail and the effective four quark theory with a massive charmed quark is found to give an accurate description of the perturbative potential for quarkonia of mass up to about 250 GeV. Predictions for the heavy quarkonium system of toponium are found to be very sensitive to the behaviour of the short-distance region of the potential and it is argued that the experimental determination of the mass and e(^+)(^-) decay width of the 1S and 2S toponium resonances (of mass around 80 GeV) with accuracy anticipated at the forthcoming e(^+)e(^-) colliders should enable the QCD scale parameter to be determined to within ± 100 MeV. The hadronic decays of the lowest S- and P-wave states of charmonium and bottomonium are examined in the light of recent experimental determination. All but the individual P-wave decays in charmonium can be adequately accounted for using reasonable values of the strong coupling constant and we are led to believe that the discrepancy lies with wavefunction corrections.