The Ego is First and Foremost a Body Ego
The ego is first and foremost a body-ego, in the sense that the self-demarcations that form in our consciousness during infancy are based on our sensory experience of our bodies as distinct from other objects. The delusion is taking these body-boundaries to define and limit our sense of who and what we are. On the physical level it is true that each of us has physical boundaries and that this body is separate from that body, but on the level of consciousness these boundaries are permeable. The edges of our bodies do not define where we end and others begin, although if we have this conviction it will feel that way. When we recognize that this experience is a delusion, we see that the ego boundaries we have used to define ourselves are only mental constructs. We realize that we have been holding onto an image of our bodies in order to define ourselves as entities.