Fantasy is an essential part of our thinking. It is imagination in its extremes and shows how far our minds can stretch beyond the normal and the natural. All creativity has an element of fantasy as when an artist paints a nude figure or a poet dreams of a perfect world, even reality itself seems to take on some sort of a fantastic or slightly exaggerated form.
Although the presence of fantasy in all creative composition could be a controversial claim and researchers would say that fantasy is a distinct mental process which is revealed only in films, stories, art work that essentially contains supernatural phenomena. All stories or art forms having magic, supernatural elements or scientifically and realistically implausible scenarios could be considered in the genre of fantasy. Yet as we know even in science certain theories as Multiple Worlds theory in quantum physics or theories about extinction of dinosaurs in Biology and biblical theory of Creationism are all based on imagination and elements of fantasy although multiple worlds theory and extinction theory are both strongly supported by facts or equations as well.
Fantasy is almost an essential ingredient in speculative science and with increased human quest for knowledge science is now more about speculation than about reality driven results and interpretation. Fantasy plays a role in science, in religion, mythology, arts and literature, in films and in almost every aspect of our life. In fact in love relationships fantasy forms an essential part of the imagination and trigger emotions. When you incessantly think about a lover in a specific way, you are engaging in fantasy and this sort of fantasy gives mental pleasure and a certain impetus to make the fantasy a reality so fantasy is a precondition to motivation. When you as a student fantasize about a life of success and wealth or fame, you are again fantasizing about your future and this is important in your future road to success.
Thus fantasy is absolutely necessary as in imagination and in extensive fantasy we not only release our unconscious needs and desires but can actively channel them in a way that would help us in the ultimate wish fulfilment. Fantasy lays the road for our future wishes and what we want to do and where we want to go. Without a certain degree of imagination and extensive fantasy we will never be able to attain anything in life. Fantasy is thus necessary as it provides mental impetus to think beyond the normal, the real and the immediate and helps us to shape our future. Fantasy could however slowly become an obsession as for example if you incessantly fantasize about someone or something that could become easily unhealthy and obsessive. Since fantasy itself is an exaggerated mental process, fantasy in only small and healthy doses with a realistic goal would be a positive phenomenon.
Any study in fantasy would have certain distinct goals and some of the ways in which fantasy could be studied within psychology would be directed towards understanding:
Fantasy as genre and as used in arts, literature, philosophy, religion, science
Fantasy as an exaggerated form of imagination or the basis of creativity in our daily life
Fantasy as the root of obsession, mental illness and loss of productivity
Fantasy as the road to understanding our wishes, desires, motivation, beliefs, attitudes and impulses
Studying fantasy as a genre would involve analysis of the elements of fantasy in literature as in the works Tolkien or Rowling and this aspect of fantasy has been successfully handled in literature, sociology and cultural studies. JRR Tolkien's Lord of the Rings or JK Rowling's Harry Potter series and recently J Cameron's Avatar highlight the strong use of fantasy and also its commercial or literary success. In fact the success of fantasy could be because of the basic need to escape from reality as all fantasies provide a temporary escape from reality which we all need. What has been overlooked is the analysis of fantasy as it begins as a positive mental process, conducive to creativity and identifying the point where such fantasy becomes harmful or mentally deteriorating for an individual.