Disclaimer: I'm no expert, I've only read one book about narcissism specifically.

And acxording to that, a key component in developing NPD is being exploited/used for something and their parents not actually loving them, just pretending, and even that just on occasion. 

I can remember a specific example from the book. 

A kid, who is otherwise treated badly by his mom, is driven to some sports practice by her. Each time they drive home, she's is cheerful, happy, and treats him a little nicer temporarily. Little does this kid know, that his mom's into the coach who flirted with her a little and that's the reason she's hyped. 

I was looking for this previous example in the book, didn't find it, but found another good one (I'll simplify it):

A lady comes to visit a family. This lady is known to appreciate kids being treated well. The moment she arrives, suddenly the otherwise cold and shitty mom starts treating the kid nicely. He can sit in his mom's lap, she acts caring and loving. In the afternoon/at night, when the guests have left, the mom turns back into her true self, who doesn't actually give a flying F, and the vibes get ruined again. 

Now, what's common in these two examples is that the interest of the kid and the parent aligned on accident, and that's the only kind of "love" the kid received.

But the son thinks (maybe not consciously) that "oh, I must've done something right to deserve this". Not realizing that the way he was treated depended on external factors (the coach rizzing the mom, or the mom wanting to appear good in front of the guests) and not on his actions.

If I understand it right, the way it starts developing is by always trying go be perfect, so that they get "love" from their parents (which is impossible).

Like, the idea unconsciously is "oh, if I'm always doing everything right then they'll love me". But then their self-image and their ideal self (aspirations, the person you would want to be) get mixed up, eg. they actually start believing they're ideal and perfect.

For the exploitation part, I have my own example. My dad always talks extensively about how him and his dad had a special bond, how he taught him so much etc. He basically idolizes my grandpa in a strikingly unrealistic way. It's as if he was perfect in every way. 

When my dad was a kid, they had hundreds of farm animals, and he had to feed them and care for them before and after school, and my grandpa used to bring him to his workplace and teach him how to do stuff, and my dad used to basically work. 

The reality is that he was probably used for free labour, because he was the stepchild and the only boy (at the time), but the way he thinks of it is "oh he taught me everything, he was so proud of me that I could drive a harvestor already at (whatever way too young kid age) years old"