Soul and False Ego

The false ego is the subtle material machine that identifies the soul with the material body which he receives as a costume in the various plays he plays life after life. 

The ego, that is, the soul, identifies itself with the characters it plays, through the False Ego.
This identification with the material body is done due to the activity of the body with which the soul is endowed, activity that the soul would carry out:
That's why the False Ego is called Aham-kara - I do. 

The false ego, the first element of creation (materials) it is a subtle machine like an energy field
and it is the first covering that covers the soul with illusion.
This machine has only one function that of giving the soul a different identity, a different ego. 

In order to be able to exist in a world that is completely inadequate to the soul, the material world, incompatible with its spiritual nature (eternity, love and absolute knowledge), the soul is put in a "car" (False Ego) which would make him believe that he was in his own element. 

With the help of this machine the soul identifies with the gross and subtle body he receives, as well as other products thereof, direct or indirect products, such as children or the family in general.
The more the soul is immersed in the whirlpool of the material world, the more will identify with the house in which he is, with the car that takes him to work, with the city, the country, with various associations to which he was attached ... 

In a more subtle plane the soul can be identified with either the mind or the intelligence, becoming very attached and proud of the ideas acquired. Cogito ergo sum - I think thus I exist. And this only because of the false ego (aham-kar). 

The material nature of the False Ego 

bhūmir āpo 'nalo vāyuḥ / khaḿ mano buddhir eva ca 
ahańkāra itīyaḿ me / bhinnā prakṛtir aṣṭadhā 

This material energy of Mine has eight divisions as follows -bhinnā prakṛtir me aṣṭadhā
earth (bhumir) water (water) fire (anal) air (vayu) ether (kham)
mana (mind) buddhi (intelligence) and of course (like eva) false ego (ahańkāra). 

The function of the False Ego It is to delude the Ego. 
The Supreme Soul Lord Sri Krishna states in the Bhagavad-ghita. 3.27 

prakṛteḥ kriyamāṇāni / guṇaiḥ karmāṇi sarvaśaḥ
ahańkāra-vimūḍhātmā / kartāham iti manyate 

The soul is deluded by the False Ego - ahańkāra vimudha atma 
and is convinced in this way, "I am the doer"  - manyate you aham karta
(but) everything that happens - sarvaśaḥ karmāṇi
it is executed by the qualities of material nature - kriyamāṇāni guṇaiḥ prakṛteḥ 

So in the state conditioned by the False Ego, everything that one thinks, feels, desires, makes decisions, and acts are phenomena of the elements of the material nature of the subtle body (mind, intelligence) and the gross one.