Traditional Principles of Animation/Exaggeration
Exaggeration is used to accentuate an action or idea. You often must exaggerate a motion or effect to ensure that the audience catches it. Exaggeration works in conjunction with anticipation and staging to direct the audience's attention to the action that you want them to see. Anticipation sets up the action, staging ensures that the action occurs where it can be seen, and exaggeration makes sure the action is not so subtle that the audience fails to notice it.
Use of exaggeration shouldn't detract from the scene, but rather enhance reality by making sure the audience catches what is happening. Remember the Big Bad Wolf's exaggerated Mannerisms in attempting to blow down the Three Little Pig's house? The exaggerated size of his chest implied that nothing would withstand the hurricane-like force of his breath.
Be careful on just how much exaggeration you use when working on human characters. Most people are very aware of how their body moves. Because of that, they are less forgiving of exaggeration of movement that goes to far beyond what is really possible.