The term derives from the Greek and Latin ἑγώ / ego, meaning "I," "me," and "self". An egocentric person cannot fully empathize, i.e. "put himself in other peoples' shoes," and believes everyone sees what she/he sees (or that what he/she sees, in some way, exceeds what others see).

It appears that this egocentric stance towards the world is present mostly in younger children. They are unable to separate their own beliefs, thoughts and ideas from others. For example, if a child sees that there is candy in a box, he assumes that someone else walking into the room also knows that there is candy in that box. He implicitly reasons that "since I know it, you know it too". As stated previously this may be rooted in the limitations in the child's theory of mind skills. However, it does not mean that children are unable to put themselves in someone else's shoes. As far as feelings are concerned, it is shown that children exhibit empathy early on and are able to cooperate with others and be aware of their needs and wants.

Jean Piaget (1896-1980) claimed that young children are egocentric. This does not mean that they are selfish, but that they do not have the mental ability to understand that other people may have different opinions and beliefs from themselves. With his colleague Barbel Inhelder, Piaget did a test to investigate egocentrism called the mountains study. He put children in front of a simple plaster mountain range and then asked them to pick from four pictures the view that he, Piaget, would see.

Younger children before age 7, during the so-called pre-operational stage, picked the picture of the view they themselves saw and were therefore found to lack the ability to appreciate a viewpoint different from their own. In other words, their way of reasoning was egocentric. Only when entering the so-called concrete-operational stage at age 7-12, children became capable of de-centering and could appreciate viewpoints other than their own. In other words, they were capable of cognitive perspective-taking.

However, the mountains test has been criticized for judging only the child's visuo-spatial awareness, rather than egocentrism. A follow up study involving police dolls showed that even young children were able to correctly say what the interviewer would see. It is thought that Piaget overestimated the levels of egocentrism in children.

Egocentrism is thus the child's inability to see other people's viewpoints. The child at this stage of cognitive development assumes that their view of the world is the same as other people's, e.g. a little girl does not understand that taking another child's ball is wrong because she views the ball as hers.

The behaviors of an egocentric person are much of the time compulsive. "Without ropes they bind themselves" said Lao Tzu. They see themselves in competition with others and since the ego is so vulnerable and sensitive they are compelled towards defensiveness and self justification. They are compelled to impress others with their talents- meaning their looks, machismo, charm-much more so than someone who is focused on external things such as a helping profession. The egocentric is shallow, often lacking the staying power to achieve long range goals. Defensive, easily angered, jealous, they suffer living in the comparatively small world of fragile ego. Egocentrism can be beneficial though: it has been suggested that in close relationships, egocentrism predicts feelings of being understood by the other person and thereby increased levels of satisfaction with the relationship.

There is also evidence that an egocentric belief in one's own strengths might be because of having more knowledge about one's own achievements and that as we learn about others our assessment of our own relative superiority decreases; egocentrism, it is concluded, is in some sense a rational or grounded approach to self - other comparisons.