What does the word "phony" mean in the context of the book The Catcher in the Rye?

Holden Caulfield is depicted as an extremely cynical, hypercritical teenager who has a traumatic past and desperately wishes to avoid transitioning into adulthood. As a neurotic adolescent, Holden feels that the majority of adults and nearly every individual in the entertainment industry is a "phony." According to Holden, anyone who is the slightest bit insincere or fake is a phony, which includes seemingly genuine individuals like Mr. Spencer. Despite being a sympathetic, concerned adult, Holden considers Mr. Spencer a phony for laughing at the headmaster's lame jokes while he is being evaluated.
Holden's cynicism towards others and intolerance towards insincerity reflect his fear of entering the competitive world of adults. By labeling people phony, Holden is indicating that they are selfish, dishonest people who are primarily concerned with attaining wealth, improving their reputation, or advancing their social status. Overall, anyone who is insincere, is fake, or has ulterior motives is a phony in Holden's opinion.

"Phony" is one of Holden Caulfield's favorite words. He uses it quite a few times throughout The Catcher in the Rye. According to the standard meaning of the word a phony is someone who is fake. But Holden expands the meaning of the word to include just about everyone he comes into contact with. He still retains part of the word's original meaning in that he applies it to those who are not one hundred percent genuine. But in Holden's vocabulary, the word "phony" comes to be used indiscriminately to describe anyone he doesn't like. And there are plenty of such people in the world.
Holden is at a difficult age. He's trying desperately to find a place in the world, to assert his developing sense of individuality. This makes him rebel instinctively against anything that smacks of convention or outward conformity to rules and standards. Fellow students, teachers, actors, the people he sees at the cinema—none of them are true individuals in Holden's eyes; they've all been defined by other people's rules, standards, and expectations. Thus they are complete phonies, all of them. Holden doesn't see himself that way, though of course he does ironically enough behave like a phony himself when he spins a web of outrageous lies to Mrs. Morrow on the train in the guise of Rudolf Schmidt, the school janitor. But Holden is too immature, too lacking in self-awareness, to realize the irony in all of this.