To exaggerate a minor problem or issue, making it seem much more serious or difficult than it actually is.
This expression first appeared in English in the 16th century, though the concept exists in many languages. It builds on the obvious contrast between a tiny molehill (a small mound of earth created by a burrowing mole) and a massive mountain, emphasizing the absurdity of such exaggeration.
The phrase perfectly captures a universal human tendency toward catastrophic thinking. What's delightful is how the image works across cultures - even people who've never seen a mole instinctively understand the ridiculous size difference being described.
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