Readers who first encounter Sancho Panza will not admire the man. He is ignorant and rude. It's not that he's a bad person, but he is selfish and mostly interested in fulfilling his own desires. He doesn't like Don Quixote much and mocks the man for seeing delusions of grandeur where he, himself, sees only the truth.
The turning point for Sancho comes when he tries to trick Quixote into believing that one of three peasant women is the one true love Quixote has been searching for. He believes that Quixote will immediately see beauty and virtue where they don't exist. Instead, Quixote sees the women for what they are.
This changes Sancho. For the first time, he's able to see something more than the mundane. This is the tipping point that helps Don Quixote see the real world while Sancho sees illusions and daydreams.
Sancho and Quixote are almost opposites of each other. A change in one signals a change in the other. It's only through Quixote changing and being more grounded that Sancho becomes more fanciful. Without Sancho being deceptive and cruel to trick Quixote and hopefully earn lots of money, he never would have set Quixote on a path to sanity and forced himself off that same path.