In what context might one use the term 'aggrandize'?

The term 'aggrandize' is primarily used in the context of enhancing or increasing one's importance, power, or wealth, often in a way that can be perceived as self-serving or exaggerated. When someone aggrandizes themselves, they may employ various tactics to appear more significant or impressive than they truly are, such as embellishing their achievements or taking undue credit for successes.

In contrast, praising someone lavishly may involve recognizing their genuine merits and contributions, while diminishing someone’s reputation or criticizing a peer does not align with the notion of self-inflation or self-promotion that 'aggrandize' implies. Thus, the correct choice is closely linked to the idea of someone trying to elevate their status beyond its actual state, which is why 'inflate one's own importance' perfectly captures the essence of the term.