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The concepts of narcissism that evolved to understand adult narcissistic disorders are inappropriate for the understanding of children, who are in the process of developing a self-image. During normal separation-individuation, the maturation of cognitive, motor, and perceptual abilities impels the child toward self-other differentiation. The child forms a concept of an autonomous, ideal self that is in harmony with both its inner needs and its outer reality. The child's own inner feelings and capacities for identification interact with actual experiences with caretakers to give this self-image its unique form. Narcissistic pathology tends to be a consequence of a mother-child interaction that tends to inhibit separation while allowing a significant degree of individuation to take place. Adopted children are particularly susceptible to fears of abandonment and are inclined to remain dependent while continuing their individuation. They construct grandiose defenses against their feelings of helplessness and vulnerability. These may be expressed in behavior or in a rich fantasy life. The author illustrates his thesis with a detailed report of the psychotherapy of a narcissistic, grandiose boy.