Sigmund Freud proposed many ideas as part of his psychoanalytic theory. Many of those ideas involve psychological defense mechanisms that humans use. One of those was called Projection.
His logic is that the human ego has to protect itself. It cannot accept that it is defective. If it does that causes anxiety.
Projection is a subconscious mechanism to protect the ego from anxiety. What Freud described was the individual recognizing that these traits are bad. The way to deal with that is to look for them in others. The concept is “I cannot be bad if I find someone who is worse.”
In order for someone to use projection, they must first understand the difference between right and wrong. For that reason, it requires the development of a conscience. This occurs in mid-childhood.
For example, a sibling might respond with a “he hit me first” as an adequate defense for hitting back. The fact that the first hit was mild and the second one was more serious does not seem to make a difference.
However, it does tend to paint things as a black and white understanding of good and bad. It is not a sophisticated defense mechanism.
For that reason, it tends to occur more in immature individuals than it does in those who develop more advanced mechanisms.
There are many examples of projection. A rapist might accuse others of rape. A cheater might accuse others of being cheaters. A criminal might deflect his criminal activities on others. Thus pointing a finger and saying rapist, cheater and criminal often means that the individual clearly recognizes those deficiencies within himself.
Like most psychological defense mechanisms, projection can help tone down anxiety for the short term. However, in the long term people who rely on projection show traits of bullying, jealousy and victim blaming.
A prolonged pattern of projection leads to a varied group of personality disorders. These include borderline personality disorder. They include histrionic personality disorder. They include narcissistic personality disorder.
The unfortunate part of this is that since it is a subconscious reaction, it is difficult for most individuals suffering from these disorders to realize it. Treatment includes self-reflection. It includes an attempt to view your own behavior objectively. That is not an easy thing for the individuals who have gone down this pathway.