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It means that you are not concentrating on what you are doing. All you can see is one tree but there is actually a whole bunch of them in front of you.

It may mean concentrating on the smaller specifics and in the process losing out on the larger perspective. Trees are part of the forest. While one may be enjoying the beauty of the trees individually but at the same time he is losing out the beauty of nature as is evident in the complete forest.

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Q: What does the term 'missing the wood for the trees' mean?
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