noun /ɪˌmædʒəˈneɪʃən/
a) The image-making power of the mind; the act of creating or reproducing ideally an object not previously perceived; the ability to create such images.
Imagination is one of the most advanced human faculties.
b) Particularly, construction of false images; fantasizing.
You think someones been following you? Thats just your imagination.
Wikipedia foundation.