An extravagant or grandiose (hence the name) word used in place of a much simpler, commonly-used one. Not neccesarily a euphemism or a cacophemism. Lexicographers, linguists, Scrabble players, and stuck-up twits primarily benefit from the usage of these. Oddly enough, the word is a grandiloquism itself. Use them when you aim to :

A) confuse,

B) impress, or

C) piss off people.

The few of us who actually like to use grandiloquisms for reasons other than the above should quit being such bastards and stop reading the dictionary like it's porn.

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