The chapter uses the history of the concept of imagination as example of how psychology creates a normative model of mental processes that affects our understanding of development. Following the traditional hierarchy of psychological functions, with abstract rationality on top, we fail to understandpsychological life as it develops in its manifold manifestations. In such a way, we have neglected the role of imagination as higher mental function despite large evidence. In the second part, the chapter presents a new way of understanding imagination. Imagination is neither bringing us in fictional world where we canfind relief to the disquieting spectacle of the world, nor a sandbox in which we can play with alternative futures. It is one of t...