When you exaggerate you stretch the truth. Fishermen tend to exaggerate the size of their fish. And children tend to exaggerate the seriousness of their cuts, in order to get a cute Band-Aid.
We all have a tendency to exaggerate. It makes our stories funnier, or more dramatic. After all, when you exaggerate, you're not really lying — you're just overstating things. The word exaggerate can also suggest that a particular characteristic is overdone or almost larger than life. If you describe someone as having an exaggerated limp, he or she might be walking like a gorilla.