Imagination; mental representation of something that is not known to be real.
Very much of what human beings believe, including what they
believe they know,
is fantasy or incorporates at least some fantasy - and what is fantasy may
turn out to be fiction, as happened with much of
religion and much of earlier science.
Note that postmodernism, Public Relations, and much political propaganda insist that what is fantasy or fact is all relative, and one should believe those with the most compelling story (generally those with the most money and no conscience). Equivalently, such folk insist there is no diffference between lying and honesty.