When you ‘upstage someone', you succeed in becoming the new centre of attraction; you divert attention from someone towards yourself. Something that you have done or said grabs everyone's attention; the person who was earlier in the spotlight fades into the background. One can upstage someone either intentionally or accidentally.
*At the conference, the professor was upstaged by the young scholar.
*The veteran actress had been upstaged by a ten-year old.
The expression comes from the world of theatre. In the old days, a stage wasn't level; it was designed in such a way that the back portion was slightly raised. This part of the stage which was slightly elevated was called ‘upstage'. The front, or the area that was closer to the audience, was called ‘downstage'. One way an actor ensured that he remained the focus of attention of the audience was to move upstage. This compelled the actors who were downstage to turn around to carry on the conversation with the individual. When they did this, the man who was upstage ended up facing the audience, while those who were downstage had their back to the audience. Since people in general are more interested in the face rather than the back, the actor who was upstage became the centre of attention of the audience.