Sidharta -

Yes, I agree that this is an area where diligence is required.  On the one hand, you don't want to ever fail to give a proper citation, but you also do not want to misrepresent someone.  I have tried to be very careful to provide proper credit. And if you are really quoting a secondary source, I feel it best to give your source and say what the original source was as well.  You could note that you have not seen the original source paper. 

In addition, I have often listed people in acknowledgements, individually and/or in groups, just because we had conversations, and I wanted to acknowledge their value.  But going back to acknowledge your first grade teacher and childhood neighbors might be going too far.   :-) 

I have found it annoying for someone to give a presentation using methodology I created and developed without ever even mentioning my name.  On the other hand, someone once quoted something I wrote, but out of context, such that it is not really my position, but I completely understood, and felt it just unfortunate, and at least partially my fault.

So, I think we can only do the best we can, and be reasonable about it if we feel we have been slighted.  Cooperation is important, and competition gets too much emphasis I think, but still, it is very important to give proper credit.  An honest effort is required.  That would be "...fair practice in scholarly communications," and if found lacking, should result in some peer pressure to correct the situation.  Unfortunately, 'peer pressure' is more often a less positive phenomenon.  Perhaps a less adversarial approach would work best.  One might, for example, send a journal references that predate an article they published and say that apparently they were overlooked, but only after first doing that with the author of the paper or article that did not appear to give proper citations, to give them a chance to correct it with an acknowledgment, if reasonable and possible.   After all, he/she/they may not be aware that their idea was not original.  At least, that is a suggestion for a situation if it needs to be corrected.  

The key here is for everyone to try to be both diligent, and reasonable.

Cheers - Jim

PS -  An odd story, but true:  A friend of mine wrote and published a pioneering article in 1963.  Then (independently, presumably), another author wrote an article for a more prestigious and easier to obtain journal, in 1970.  The 1963 article, I believe, is uncannily similar - though 'similar' does not seem a strong enough term to me - to the 1970 article, though as I recall, the 1963 article included additional material.  However, it is the 1970 article which has so often been cited, even by my friend who wrote the 1963 article!   To the best of my recollection, the 1970 article does not cite the 1963 article.  I think my friend only cited the other person's 1970 article in later years because (1) he wanted to not assume the worst, (2) he knew it was easier for others to obtain the 1970 article, and (3) he had more wide-ranging interests.  But it just does not seem right to me.  To the best of my knowledge, this is a true account, and something that I noticed myself, but I never heard discussed by anyone.  Perhaps the 1970 article author never saw that 1963 article, until after 1970.  But I feel that my friend never got proper credit, even though both the 1963 and 1970 articles were briefly discussed (together) in a famous textbook published in 1977. 

I think one of the reasons for citing other works and publications is a defense against allegations of plagiarism. Ideally, good citation should show how your contribution fits in, by correcting previous research, filling gaps, adding support or extending current research or thinking.

Citation has many effects from acknowledging previous works, a prerequisite for acceptance (by some journals or editors), self-citation,  etc.  I think honest and professional citation of references must be practiced, be information prominent. It should not be abused (to increase Impact Factors), and be ethical. Also, the limit for self-citations be set as decency. 

There are many good advises and discussions about citation even among RG questions. Few are listed here. The following guide by University of Southern California is to provide advice on how to develop and organize a research paper. Part 11 is devoted to Citing Sources. In any academic writing, you are required to identify for your reader which ideas, facts, theories, concepts, etc., are yours and which are derived from the research and thoughts of others. Whether you summarize, paraphrase, or use direct quotes, if it's not your original idea, the source needs to be acknowledged.

http://libguides.usc.edu/writingguide/citingsources

https://www.researchgate.net/post/Is_self-citation_good_for_showing_the_continuity_of_the_research_and_avoiding_self_plagiarism_Please_share_your_experience_and_thought

https://www.researchgate.net/post/Is_it_ok_to_cite_a_review_rather_than_the_original_research_articles_highlighted_within_the_review?_sg=OUOWZPheeCfhMZWfwDUXEj4ghgRT9ayx6noEXv_39ebTxIuD3ESa9BCFrcJkTfX_.PgHqK_V375TY9wCRrTXm1lSh0o7FWbt_KyXGzQjrrem0xaMhAPrLXVGY7jr6cTNj.UUkweRDs4qrzhDHMov42A4Xgh59kY2lZs_9gWVMfG_PVYGlg-e3gKn_Fkoz1SEgX&_tpcectx=search

Thanks Prof. Knaub for your very interesting comment. Particularly, this part is funny: "But going back to acknowledge your first grade teacher and childhood neighbors might be going too far.   :-)  ".

Admittedly, to be reasonable and diligent doesn't mean that we should go that far...

The true story which you have narrated is unfortunate, and I believe that the original author should have deserved some credit. What I think is that, perhaps these unfortunate incidences could be well avoided by taking advantage of the pre-publication preprint services that many public repositories offer today: just in case if anyone forgets to cite the original, the author could easily point out to the repositories where her paper is being hosted. So that the original idea even if it is not published as yet (but still available to the public) could get due credit.

Regarding proper citation, that is quoting someone out of context, may be due to carelessness or improvidence, and this is where more diligence is essential.

Dear Dr. Mahmoud:

Thanks for your comment regarding the essence and reasoning behind proper citations. Indeed citations should fit and must be relevant to the current topic/theme through which a researcher is able to support his/her claim in order to validate the ideas expressed in the research. It is factual that if any idea if not original, or derived from others, it must be cited, and cited properly. It is also a fair means to respect and honour the original researcher and give due credit to his/her original work.

The links are much helpful. Thanks again.

Best Regards,Sidharta