Grandiose Fantasies
This refers to the narcissist's need to fend off inner emptiness, feel unique and in control, and avoid feelings of defectiveness and insignificance.
While we all fantasize, the trouble with narcissist fantasy is that the narcissist treads a fine line between what is magical thinking and what is real.
As unhealthy as it is for the narcissist, it becomes gaslighting for his family members and contributes to their confusion, frustration, and magical thinking.
In particular mental health disorders, such as delusions and schizophrenia, fantasies can be mistaken for reality, become too rigid, or cause significant individual distress, like paraphilias.
While those unhealthy fantasies often cause real problems for individuals unable to differentiate fact from fiction, for most people, dreams are harmless and provide a beneficial escape from the here and now.