Projection
We all have an image of how we "should be". Freud called it the "Ego Ideal". But sometimes we experience emotions and drives or have personal qualities which don't sit well with this idealized construct. Projection is when we attribute to others these unacceptable, discomfiting, and ill-fitting feelings and traits that we possess. This way we disown these discordant features and secure the right to criticize and chastise others for having or displaying them. When entire collectives (nations, groups, organizations, firms) project, Freud calls it the Narcissism of Small Differences.
Projective Identification
Projection is unconscious. People are rarely aware that they are projecting onto others their own ego-dystonic and unpleasant characteristics and feelings. But, sometimes, the projected content is retained in the subject's awareness. This creates a conflict. On the one hand, the patient cannot admit that the emotions, traits, reactions, and behaviors that he so condemns in others are really his. On the other hand, he can't help but being self-aware. He fails to erase from his consciousness the painful realization that he is merely projecting.
So, instead of denying it, the subject explains unpleasant emotions and unacceptable conduct as reactions to the recipient's behavior. "She made me do it!" is the battle cry of projective identification.
We all have expectations regarding the world and its denizens. Some people expect to be loved and appreciated - others to be feared and abused. The latter behave obnoxiously and thus force their nearest and dearest to hate, fear, and "abuse" them. Thus vindicated, their expectations fulfilled, they calm down. The world is rendered once more familiar by making other people behave the way they expect them to. "I knew you would cheat on me! It was clear I couldn't trust you!".
