This inability to understand the inner worlds of other people, and his reliance on projection, is one of the reasons why a narcissist usually ends up plagued by paranoia.
Because he sees interactions with people as a game based on manipulation and domination, he imagines that those who interact with him are trying to manipulate, dominate, and harm him as well. If he happens to be a grand tyrant responsible for the suffering of legions of people, then of course he has many enemies trying to get rid of him, so his belief that others are out to get him is at least partly justified and reality-based.
But even if the scale of his activities is smaller, and his victims fewer and not as severely harmed, he will develop a belief that people, including his intimates, are trying to hurt him in some way. Granted, his misdeeds and crimes have earned him many enemies, but he is projecting on others his view of the world where psychopathic dealings apply to everybody, without exception. Even if faced with an expression of kindness and trust, he would not recognize it as such. That is the sort of inner devastation that the absence of conscience brings about.
Ultimately, there is no escape from the ruthless, paranoia-infected world in which a narcissist finds himself immersed over time, other than through a total destruction of it and/or himself.
The Narcissist's Inner Life (such as it is)
The narcissist's emotional life is as shallow as his relationships with others. His most common emotional states are chronic empty discontent--his baseline; excitement when engaged in his game, and boredom when not; pride when winning and/or receiving the adulation to which he is entitled; contempt for "the weak" (i.e., non-winning people); jealousy when he sees others succeeding; and rage when he is losing, feels neglected/rejected or opposed, or when his weaknesses are exposed.
The insatiability of a narcissist's ego is one of the reasons for his discontent. There is never enough power or adulation. Either the game is on and he is winning, or he may as well not exist. When not at the center of attention and adoration, he withers and sulks. If not pursuing his next object of gratification, he's bored and restless.
He does not tolerate aloneness well and, even if talented, has no significant interests or a desire to grow his talents beyond chasing power and adulation. But for this, he needs other people willing to admire him and relinquish their possessions, willpower, dreams, or whatever else he needs to further his self-centered goals. He learns to extract those resources by any psychological and physical means at his disposal early on in life. He believes he is entitled to them, and other people exist as their providers; in fact, other people are the resources to exploit.
Even if a narcissist has a high IQ, he sounds--and is--unintelligent because his emotional stuntedness makes him incapable of grasping essential facts of human life, particularly higher level feelings and values, as well as different perspectives on life's issues. When his IQ is average or below, his obvious limitations will be all the more apparent. While narcissists will actively espouse on many occasions how "smart" they are, they totally lack the capacity to be "bright," the elements of which include the capacity for intellectual and emotional reasoning and debate necessary for forming rational ideas and predicting outcomes.
A narcissist's cognitive style as well as his behavior can be best described as impulsive. He is averse to sustained effort and this makes him a lousy worker; but then he is not cut out for something as boring and unglamorous as work--his destiny is far grander than that. Work is for losers. He has people doing it for him, and then stamps his name on the finished product, taking credit for their accomplishments.
An exception to the impulsivity that characterizes his cognition and behavior may be his long(er)-term schemes. When he is engaged in devising his next power grab or plotting revenge, he can maintain his focus and plan his actions in ways that are not typical for his day-to-day behavior; but even then he has difficulties with the follow-through in the absence of instant and/or spectacular gratification.
A narcissist's speech is vague, impressionistic, light on facts, and often contradictory. No matter the subject, however, his words are almost always seasoned with grandiosity, resentment, and sometimes sadism. He makes up his arguments, such as they are, as he goes, without any regard for truth or consistency, but it is not really that he lies. Just as he is not constrained by values, he is not hampered by facts and figures, so he creates his own to suit his needs at the moment.
It is not, however, as though his understanding of himself and the world is entirely fact-free. There are three major facts around which his whole reality is organized:
1. I am great.
2. People unfairly malign me.
3. I will show them (they will pay).