[Note: I italicize phrases I borrow from the chapter, and link to phrases I borrow from other chapters to help tie chapters together. While making it more tedious to read, the Tao Te Ching is best pondered in the context of the whole.]

The best of all rulers is but a shadowy presence to his subjects, and so on, applies to all aspects of life. Although, it is easiest to see in the relationship of parents to their children, and employers to employees. For example, being a shadowy presence in a child's 'knowing' allows children to blossom naturally, rather than conform to their rulers' (parents') desires. Lacking sufficient maturity for that, parents become 'best friends' with their kids. Lacking that, parents use authoritarian parental dominance, and when no one responds, [they] roll up their sleeves and resorts to persuasion by force. Finally come those parents who, being children themselves and driven by many thoughts of self, are easily manipulated by kids who now rule the roost. The employer -- employee dynamics are similar except that these two 'chose' each other. (That brings in a whole other set of dynamics, eh? Enough to write a book on I dare say.)

The desire to be in control is an underlying emotion in all our relationships with life. 'All' meaning ALL, i.e., our relationship to the ground beneath our feet; to our plans and projects; to the weather; to our body and mind, all people, all animals, etc. What does it mean to be a shadowy presence? First, this does not mean being gone! It means being fully present yet shadowy. A shadowy presence comes from knowing, yet thinking that one does not know. A tentative and hesitant air envelopes all relationships, helping life flow more naturally. Of course, the irony is that we tend to 'freak out' when life starts to 'flow more naturally' – we feel we're losing control. In the end, it is all about our visceral need to control life. Why this desire to control life? The less able we are to overcome our selves, the more we feel a need to overcome others – plain and simple. Overcome? Not as we usually understand it; rather, the submissive and weak will overcome the hard and strong kind of overcoming. Submissive and weak does not mean we don't persevere. To the contrary, only through weakness are we truly able to persevere. In persevering, our desire to control life wanes, as our shadowy and hesitant presence waxes.

Finally, here's the plain and simple literal translation:
greatest (superior), below (inferior) know of have.
its next intimate and of reputation (praise).
its next fear (respect).
its next insult (bully).
true (trust; believe) not enough herein (where; how; why), have not true herein (where; how; why).
long time its value speech (word, say, speak), merit (result, work) accomplish (finish) affair satisfy,
hundred names (common people) all say I natural (at ease, free from affectation).

And now with some selective pruning with my poetic license:
The greatest is beneath knowing.
Next comes that we hold dear and admire.
Next comes that we respect and fear.
Next comes that we insult and abuse.
Where truth is insufficient, there is no truth therein.
Slow to speak, results in accomplishing affairs satisfactorily,
Everyone will say I am natural and at ease.

Note: There is no 'ruler' per se in the original. Without 'the ruler', it is easier to see how this chapter can refer to a 'bigger picture', and our relationship to it: how we drive; deal with the environment; work; play; eat, and so on. Notice how truth, trust, faith, and believe share the same 'field'. Slow to speak brings to mind that aphorism, 'words are cheap'.