Yeah, but people are not only really bad at evaluating their own alignment; they are really bad at evaluating the alignment of their friends and neighbors as well. Most people will identify as good people whom they like, and who are friendly. But a person who is amazingly friendly and cheerful and who makes you feel good and who is nice to you doesn't have to be good. <...> There is a line in Lord of the Rings, where Aragorn who looks like homeless ruffian is trying to win the trust of Frodo - an aristocratic hobbit. Frodo's servant is telling him that it's beneath him to have anything to do with a person like Aragorn, and Frodo has a gift of discernment and says that Aragorn "Seems foul, but feels fair" but a servant of the enemy would go out of his way to look fair, but would feel foul. Most people are not as wise as Frodo, and what seems fair feels fair to them.
Real life is filled with examples like that and I've used the Frodo meeting Aragorn story more than once to illustrate the difference of "seems fairer but feels fouler".
Alignment isn't what you say you believe or what you do that gets you rewarded, it's what you do when you think you can get away with it. So the fact the neighbors respected the guy and thought he was a good person tells us nothing about his alignment. And real evil doesn't look like snarling villains. It looks like the person in the mirror. Above all, people assume goodness of people who are like themselves. It's the old monkey hind brain talking.
This is all very useful IRL, but one huge difference between RL and fantasy is that, at least in many (but not all) fantasy games, there are supernatural forces of Good, Evil, Law, Chaos, etc., and, indeed, many characters are servants of these very powers.
Even in a setting where there isn't a supernatural evil is often signaled by some kind of serious violation of personal integrity and total submission. So, for instance, in
Mass Effect: Andromeda (unfairly maligned IMO), the main adversary, the Kett, have goals that involve essentially a forced union of all other species with them, with the corresponding complete loss of identity. I think in D&D terms they're a good example of Lawful Evil. There's another adversary group, the Roekaar, that starts out as misguided whose methods go too far. Their primary motivation is fear of loss of identity after contacting aliens. However, things really get out of hand and they start going down the well-worn path that revolutionaries and resistance groups often have of fighting a dirty war. It's hard to say what their alignment is, exactly, but they're pushing towards Lawful Evil. Finally, the last set of adversaries, the various outcasts and pirates, are mostly motivated by selfishness and/or outright homicidal crazy. Many of them seem to qualify as Neutral or Chaotic Evil.
Where one can play with these ideas in a D&D context often lets Good metamorphose into Evil. For instance, a Lawful Good society can have the leader go bonkers, much as the Kingpriest of Istar did in Dragonlance. Indeed,
Sauron's motivation to turn to serve Melkor in Tolkien's Legendarium comes primarily from an excessive love of order and keen results that Melkor seemed to accomplish.
Chaotic Good wins, because players can't be anything else, it's too hard, and your DM won't let you be evil.
