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 cute Band-Aids.
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.