Yes, and if you subscribe to some of Jung's ideas, the psyche contains various 'objects' or 'sub-personalities' which interact with each other. For example, many people seem to harbour an internal critic, who mildly or maybe ferociously judges oneself. It's an easy step to argue that some of these 'internal objects' are projected outwards onto various things in life, e.g. the royal family.
One point here is that these interactions in the psyche are not particularly rational - for example, the inner critic can be neutralized by anger, but less so by cool argument, it just keeps on nagging at you.
Jung of course went so far as to posit a 'higher power' in the psyche, which sort of stabilizes things, has a central executive role, and so on. (Although with some people, this is deficient!). And this too can get projected, well, onto a higher power, what else.
I think this is similar to Freud's critique of religion ('The Future of an Illusion' being the famous book), but Jung was more sympathetic to religion; Freud hated it.