The narcissism of small differences

Man, I wish a took a psych 101 course. I think people recognize what Freud labelled "narcissism of small differences" -- a Hindu and a Christian may live in absolute peace as neighbours, but don't dare seat an Irish reform Catholic next to an Irish conservative Catholic at a dinner party. Couples exaggerate differences to retain identity. Maybe it plays a role in ethnic conflict (which combines power and identity).