Raising of imposing palace is beginning of empire decline means
Answers
In the passage, John Stuart Mill was taught that he was an ordinary person, and other children of his age were underestimating themselves. This was done so that John goes through the process of natural growth and stays down to earth. Excessive adulation and pampering is not good for children as it hampers their natural growth.
The above lines mean that once parents decorate their child as superior or better than others, that is where, the decline in the development begins as the child feels already better and ahead of others. This same thing is true even in case of empires and nations, in the sense that when they get disconnected from being normal, and are decorated and presented excessively better than other, that is where, the growth is stopped.