theory of mind
Theory of mind is your built-in ability to guess what is going on inside someone else's head — what they believe, want, feel, or intend — even though you can never see those thoughts directly. It is the everyday mental skill behind a sentence like "she's looking for her keys because she thinks they're in her bag." You did not read her mind with magic; you quietly built a little model of her mind and used it to explain and predict what she does. The name is a bit grand, but it just means the silent theory each of us carries about the fact that other people have minds of their own, filled with their own private picture of the world.
What makes this powerful, and surprisingly hard, is that you have to keep track of a belief that may be wrong — separate from what you yourself know is true. The classic test for children is the "false belief" task: Sally puts her ball in a basket and leaves; while she is gone, Anne moves it to a box; where will Sally look when she comes back? To answer "the basket," a child must hold Sally's outdated belief in mind even though they know the ball has moved. Most children pass this around age four, and the skill keeps growing into reading sarcasm, white lies, hints, and hidden motives. In the brain it leans on a network including the temporoparietal junction (where the temporal and parietal lobes meet, behind the ear) and parts of the prefrontal cortex (the planning region behind the forehead).
Theory of mind is the quiet engine under almost everything social: cooperation, teaching, deception, storytelling, manners, and feeling moved by a character in a film. When it develops differently — as is common in autism — or is disrupted by injury or illness, people may grasp facts about the world easily yet find it effortful to read unspoken intentions and beliefs. It is closely tied to empathy but not the same thing: theory of mind is figuring out what someone thinks; empathy is sharing what they feel.
A handy rule of thumb: theory of mind is reading what someone thinks; empathy is sharing what someone feels.