Arthur C. Clarke has put it well decades ago:
And I make the case here that:
Any sufficiently competent individual is indistinguishable from a charlatan".
Why would someone say something so outrageous? The answer is surprisingly simple, and any sufficiently competent individual will understand it immediately. ;-)
I takes a peer to recognize competence. Someone needs to understand what you do in order to tell if you can really do it. So, the higher up you are on any conceivable scale of excellence, the fewer people will exist in you immediate social context which can confidently attest to your competence. For example, If I was to play chess against a top grand master and another average chess player, I wouldn't be able to tell which one is the best because to me they would appear as simply "better than me" players.
Competence assessment may not be too challenging for skills which are easily and objectively measurable, like how fast you can run 100 meters. But even in sports, if you move to more complex modalities like figure skating, You need a panel of many specialists and the final veredict willl always depend on contextual variables, such as the quality of the ice, the choice of the music, luck, etc.
Even in professional categories where performance evaluations should be more "scientific", things are not that clearcut. Consider science. Competence in science is measured by the number of scientific papers published, weighted by the impact of the journals in which they appear. However, in order to maximize productivity, scientists have to carefully thread around the most complex problems and try to go for the low-hanging fruits, so to speak. So technically, the most competent scientists will be penalized by a lower productivity, if they give in to the temptation of tackling the hardest problems, they feel they can solve. This problem is even more dramatic, when you consider that the supply of minor scientific problems, bordering on the non-scientific, is virtually endless. To agravate this picture, there are always many, well documented, ways to cheat productivity indicators.
The situation gets even hazier when you move on to more mundane professional categories, where performance is not at all measurable in any objective way. When you apply for a job in <plug your profession here>, you have to talk about your competences and your evaluator has no clue whether you are really all that, or if you are making it up. In fact, the farther away your skill-set is from the set of skills of the interviewer, the higher the chance he/she will think you are making it up. Here candidates must walk a thin line between saying to little about themselves and being deemed inapproprate for the job, and saying too much and be considered a charlatan.
One might argue that in theory if someone is hiring you for a job they must be your peer, and most likely more competent than you. But although that would be desirable, it is not always the case. In today's world, human activities are being re-mixed into new revolutionary businesses all the time, and it is not at all uncommon for a business person, to be interviewing a mathematician, or for an engineer to be hiring a philosopher. To be honest, the risk is not only for the competent professional to be considered a charlatan. But there is also an enormous risk for the recruiter to hire a charlatan! And there is plenty of charlatans out there to make matters worse.
The other resource people use are recommendations, but even these are not guaranteed, since people exchange recommendations as if they were some kind of commodity, I recommend you and you recommend me in return. The best examples of this are to be found in professional network sites such as LinkedIn.
Is there any way out of this conundrum? Well, not easy or generally applicable ones. For professionals, one key thing is to strive to give visibility to your work. For example, if you are a software developer, and work on a proprietary software company, You have no code to show to attest your skills, so try to work on a open-source software project on the side. For Recruiters, Look for objective indicators of competence, remember that traditional or "official" indicators are the ones charlatans will excel at faking, so be creative in examining competence, use multiple evaluators and try to have a peer with no vested interest look into the candidate profile and production record.