The narcissistic rage hypothesis assumes that terrorists are full of rage that developed because of their imperfect psychological development in childhood.
The concept of narcissistic rage in psychology, speaking very generally, starts with the premise that children are "grandiose" at a certain stage: they experience themselves as all powerful. If they do not have the opportunity to test their power in reality, as they grow up, they do not learn the limits of their control over events, nor how to live normally among other people, despite these limits. In adulthood, external threats or other events that threaten the narcissist with loss of control are greeted with intense rage, and the effort to assert control while avoiding the shame of its loss.
"Taking the-terrorists-as-mentally-ill approach, this hypothesis concerns the early development of the terrorist. Basically if primary narcissism in the form of the "grandiose self" is not neutralized by reality testing, the grandiose self produces individuals who are sociopathic, arrogant and lacking in regard for others. Similarly, if the psychological form of the "idealized parental ego" is not neutralized by reality testing, it can produce a condition of helpless defeatism, and narcissistic defeat can lead to reactions of rage and a wish to destroy the source of narcissistic injury. "As a specific manifestation of narcissistic rage, terrorism occurs in the context of narcissistic injury," writes Crayton (1983:37-8). For Crayton, terrorism is an attempt to acquire or maintain power or control by intimidation. He suggests that the "meaningful high ideals" of the political terrorist group "protect the group members from experiencing shame."
From, "The sociology and psychology of terrorism, Who Becomes a Terrorist and Why?" Federal Research Division, Library of Congress, September 1999.

