The Little Shaman is a spiritual coach & specialist in cluster B personality disorders, with a popular YouTube show and clients worldwide.
Narcissism is often pegged as an emotional problem, or a behavioral problem. It is both of these things but the truth is that those are side-effects of the real problem. Pathological narcissism is an identity problem that has occurred at the fundamental, base level. It is the failure to distinguish the self from external objects. External objects are other people. That means that people who are narcissists have trouble understanding that they are separate individual beings from other people and they are not able to function as separate people. The separation of the self from external objects is supposed to happen when a person is a baby, meaning under a year old. For whatever reason, this did not happen correctly for narcissists. Because of that, they need other people in order to function, just like a baby.
Babies experience themselves through their caregivers because they don't have a sense of self or an identity that can function by itself yet. They rely on their caregiver to provide this information for them. The caregiver tells the baby the baby's value. If the caregiver has positive interactions with the baby, the baby will have a positive image of themselves. Because babies have no sense of self or a mature identity, they can't create self-worth. They rely on caregivers to do that for them. It is the same with narcissists. They cannot create self-worth, so they need other people to tell them their value. Otherwise, they have none. This is what is called "narcissistic supply." They need a supply of attention and validation from other people that they turn into self-worth because they cannot create it within themselves.
This is the reason for all the things you are noticing, whether they are good or bad. It is the reason narcissists are nice. It is the reason they are mean. It is the reason they do everything: their entire life is a desperate search for worth so they can stop themselves from bottoming out and becoming suicidal. Narcissistic behaviors are defensive, even if they don't seem to be. The narcissistic person is in a fight for their life against the shame, worthlessness and self-hatred that is inside them all the time and the only way they know to fight it is by denying that they are anything other than perfect. This usually means they have to attack and destroy any proof to the contrary, even if it's only someone saying they made a small mistake. Imperfection is intolerable for narcissists, because they inside they believe if something is not perfect, it has no value. That includes themselves. This is the reason they often cannot admit to mistakes or flaws, and why they torture others mercilessly if they make a mistake or a bad decision. Because narcissistic people cannot create anything on their own, the only way they can feel good is if someone else feels bad. If you've made a mistake, they can now feel better than you in some way and they make sure they capitalize on that.
Narcissistic people use others as mirrors to see themselves, the same way that very small children do. Whatever their reflection is in that particular mirror will determine how they can feel about themselves. If someone has a negative opinion of them, the narcissist's image in the reflection will be negative and unpleasant. If someone has a positive opinion of them, the narcissist's image in the reflection will be positive and pleasant. The problem is that they depend so much on these reflections that they become resentful of their dependence yet paranoid of losing them, so they often behave in ways that can damage the situation, often irreparably. Often, it is due to things like jealousy and envy. The narcissist is jealous of the other person, but the jealousy is projected onto them as a defense mechanism and it is believed they are jealous of the narcissist. Insecurity figures hugely here, too. For example, the narcissist may believe someone has begun to look down on them even though it isn't true, and they start being rude or antagonistic to that person because of it. Because of this behavior, the person's opinion of the narcissist then actually does change from positive to negative. It's a self-fulfilling prophecy, but the narcissist is usually unable to see that they have caused the entire thing. They simply believe they were right from the beginning, for whatever reasons they told themselves.
This is the reason narcissistic people have a false self. The identity has become fractured and cannot function correctly, though it's not a truly separate personality like you would see in a multiple personality. The false self is a defensive reaction to the narcissist's internal worthlessness and need for that positive reflection. It is a projection of the person they believe they have to be in order to get people to have positive opinions of them. Because they know it's not real, they live in fear that others will see who they really are and reject them. That is why they often reject people first, either by abusing them or leaving.
Sometimes people say, "Well, everyone is a little narcissistic." That's true, in a manner of speaking. Narcissism involves the ego, and the ego is the thing inside you that says, "I." It is the thing that says, "What about me?" It's important to remember that narcissism is a spectrum. There is healthy and necessary narcissism, like caring about whether you get hurt or not or speaking up when something is unfair to you. And narcissism is defensive, remember, so narcissistic behaviors can and do show up in people who are not narcissists sometimes. However, this is about patterns of behavior. Unhealthy narcissism takes the necessary focus on the self that we see in healthy narcissism and twists it to an extreme. Everything becomes about the self. Everything is, "What about me?" The further down on the spectrum someone is, the more unhealthy narcissism you are going to see. As the spectrum continues, the focus on the self becomes more and more extreme, and the dysfunction of the ego becomes more and more detrimental to the person's life. The more narcissistic somebody is, the more rigid their narcissistic traits will be and the worse their narcissistic behavior will be. If someone is pathologically narcissistic, unhealthy narcissism will impact almost every part of their life in some way. Their behavior is generally dysfunctional and can no longer be mistaken as "normal narcissism" or chalked up to, "Everybody acts like that sometimes."
It's important to understand that if someone is operating with this level of narcissism, dealing with them is usually going to be extremely difficult. Their perception is likely to be very affected by it, almost to the point that they can seem delusional at times. Unfortunately, the worse narcissism is, the harder it is for someone to understand that this is the problem. They lack insight, they lack maturity, their development has been arrested and because of their affected perception, they may literally be unable to see their own behavior is the problem. To them, it really looks like the problem is everybody else. They have divorced themselves completely from their feelings and their lives depend on believing they are never to blame for anything. This is the only way they can sustain their existence. For people with this level of narcissism, the prognosis is unfortunately very poor.