Using a parameter reference as the optional argument of a macro

This kind of “self-reference” is easy to obtain with xparse:

\documentclass{article}
\usepackage{xparse}
\usepackage{imakeidx}

\NewDocumentCommand{\Index}{O{#2}m}{%
  \textit{#1}\index{#2@#1}%
}

\makeindex

\begin{document}

Here I index `Term': \Index{Term}

Here I index `Actually Used Term' \Index[Actually Used Term]{z}

\printindex

\end{document}

Adjust to suit; in the example, the second term will be sorted as “z”, so it will appear second.

The traditional method uses \@dblarg:

\makeatletter
\DeclareRobustCommand{\Index}{\@dblarg\@Index}
\def\@Index[#1]#2{%
  \textit{#1}\index{#2@#1}%
}
\makeatother

If you want to avoid the problem that \Index{Term} and \index{Term} will index twice, because the former would do \index{Term@Term} that's different from \index{Term} to MakeIndex’s point of view, you can modify the command into

\NewDocumentCommand{\Index}{om}{%
  \IfNoValueTF{#1}
    {\textit{#2}\index{#2}}
    {\textit{#1}\index{#2@#1}}%
}

EDITED to actually use \index.

\documentclass{article}
\usepackage{imakeidx}
\newcommand\Index[2][\relax]{%
  \ifx\relax#1\def\actualarg{#2@#2}\else\def\actualarg{#2@#1}\fi%
  \textit{#2}%
  \expandafter\index\expandafter{\actualarg}%
}
\makeindex
\begin{document}

\Index{term}

\Index[TermActuallyDisplayed]{term}

\printindex

\end{document}

The xparse package is a great tool which can do what you want (it can declare a command with an optional argument with its default value taken from another argument). See the following example:

\documentclass{article}
\usepackage{xparse}
\usepackage{imakeidx}
\makeindex

\NewDocumentCommand\Index{O{#2}m}{%
  \textit{#2}\index{#2@#1}%
}
\begin{document}

\Index{xyz}

\Index[xyz|textbf]{xyz}
\printindex
\end{document}

Here both words xyz are italicized in the text, and the optional argument can add some additional formatting info for the index itself. The resulting .idx file:

\indexentry{xyz@xyz}{1}
\indexentry{xyz@xyz|textbf}{1}

and .ind (basically, the default formatting):

\begin{theindex}

  \item xyz, 1, \textbf{1}

\end{theindex}