This study compared students’ perceived understanding of commonplace physics terminology with their actual understanding of it. First‐year university physics students were presented with a list of sentences containing 25 selected words which are lay terms, but which have specific meanings in physics discourse. A first test required them to identify whether or not they thought they understood the meanings of the given words. This test was followed directly by another which diagnosed their actual understanding of each term. Comparisons of scores showed that the average student tested had an inadequate grasp of the meaning of more than 15 of those words that he/she had professed to understand. It is surmised that this high degree of self‐delusion about the meaning of terms could be a significant obstacle in physics instruction.