The coercivity mechanism in permanent magnets was analyzed according to the effects of domain nucleation and domain wall pinning. The coercivity mechanism of a TbCo thin film with high perpendicular magnetic anisotropy was considered in terms of the local inhomogeneity in the thin film. The initial magnetization curves of the TbCo thin films demonstrated domain wall pinning to be the main contributor to the coercivity mechanism than domain nucleation. Based on the coercivity model proposed by Kronmuller et al., the inhomogeneity size acting as a domain wall pinning site was determined. Using the measured values of perpendicular anisotropy constant ($K_u$), saturation magnetization ($M_s$), and coercivity ($H_c$), the inhomogeneity size estimated in a TbCo thin film with high coercivity was approximately 9 nm.