Psychological projection is a well-known defense mechanism used by humans to:
defend themselves against their own unconscious impulses or qualities… by denying their existence in themselves while attributing them to others.
The concept has some value as an analytical guideline but can also be highly misleading by pointing analyses in wrong directions.
One wrong direction is confirmation bias where an assessment of projection can lead to cherry picking and/or ignoring counter-evidence.
Another wrong direction can arise due to the false consensus effect, which “tends to lead to the perception of a consensus that does not exist.”
From a FIML point of view, psychological projection is a macro and meso level analysis which fundamentally ignores the importance of micro information. (See Micro, meso, and macro levels of human understanding.)
From a FIML point of view, a great deal of human psychology can only be understood by analyzing micro-level interactions in real-time.
This is so because only a FIML-type of analysis can access the actual micro-data that go into the formations of actual interpretations. In contrast, meso and macro level analyses arrive “fully loaded” with the biases endemic to those levels of communication and understanding.
Like the psychological concept personality, the concept of psychological projection has general descriptive value in some situations.
These concepts become counterproductive and limiting, however, when they are accepted off-the-shelf as important insights into specific situations or the behaviors of particular people.
I am very confident that micro data generally will not support most ready-made meso and macro analyses of human psychology or behavior.