According to Tolkien, in the past, Galadriel had been impatient with the elves way of living (ruling themselves in councils, not interfereing with the other races) and she wanted to be more powerful to help the younger and less wise races develope. She wasn't allowed to do this and her stay in middle earth was partly an exile. She is made to learn her lesson by staying in middle earth and not interfering. When Frodo offers her the ring, she has her chance to gain was was her heart's desire, but has grown wiser and sees where ruling races for their own good can lead to. She is still a powerful entity in middle earth and realises at that point that she must give up that power (diminish) and go to her races home which lies over the western sea. The quote you have given is actually something like " I will diminish into the west andf remain Galadriel" She finally realises the corrupting and depersonalising nature of power, which of course is one of the story's main themes. The last part of the return of the king has a beautiful description of the Havens and the elves leaving. Go check it out, I won't quote it as it would spoil the ending of the story..... Yes I am a long time LOR fan , first read it about 38 years ago.