He is both a star and a great lead actor, a rare combination. Guys like Robert Duvall, Gene Hackman, Dustin Hoffman - all great leading actors, but not stars, in the sense that they have no strong personalities, i.e. they disappear into their roles. OTOH, Marlon Brando and George C. Scott (to name two examples) always infused their roles with their own personalities. Paul Newman too.

Examples abound today: Chris Pratt and Dwayne Johnson are not really actors at all, but they're great movie stars. Harrison Ford and Sean Connery were always much more movie stars than they were actors.

Nicholson is truly amazing imo because, despite his dominant and attractive personality, he has disappeared into a number of his roles, e.g. The Pledge, About Schmidt.