Fantasy [the basis of Active Imagination] in Psychological Types and The Red Book:

This autonomous activity of the psyche, which can be explained neither as a reflexive reaction to sense-stimuli nor as an executive organ of eternal ideas is, like every vital process, a perpetually creative act each new day reality is created by the psyche. The only expression I can use for this activity is phantasy. Phantasy is just as much feeling as thought ; it is intuitive just as much as sensational.

There are no psychic functions which in phantasy are not inextricably inter-related with the other psychic functions. At one time it appears primordial, at another as the latest and most daring product of gathered knowledge. Phantasy, therefore, appears to me as the clearest expression of the specific psychic activity. Before everything it is the creative activity whence issue the solutions to all answerable questions; it is the mother of all possibilities, in which too the inner and the outer worlds, like all psychological antitheses, are joined in living union. Phantasy it was and ever is which fashions the bridge between the irreconcilable claims of object and subject, of extraversion and introversion.

In phantasy alone are both mechanisms united. ~Carl Jung; Psychological Types, Problems of Types in History, Page 69.

I withdraw and sit down on a rock high above on the ridge of the mountain. And this speech began in me: Great Izdubar, you are in a hopeless position-and I no less. What can be done? It is not always necessary to act; sometimes thinking is better. I am basically convinced that Izdubar is hardly real in the ordinary sense, but is a fantasy: It would help if the situation were considered from another angle … considered … considered … it is remarkable that even here thoughts echo; one must be quite alone. But this will hardly last. He will of course not accept that he is a fantasy, but instead claim that he is completely real and that he can only be helped in a real way: nevertheless, it would be worth trying this means once. I will appeal to him:

I: “My prince, Powerful One, listen: a thought came to me that might save us. I think that you are not at all real, but only a fantasy.” ~Carl Jung, The Red Book.

Izdubar and I come to a quiet dark garden and a secluded house. I hide Izdubar under the drooping branches of a tree, go up to the door of the house, and knock. I ponder the door: it is much too small. I will never be able to get Izdubar through it.
Yet-a fantasy takes up no space! Why did this excellent thought not occur to me earlier? I return to the garden and with no difficulty squeeze Izdubar into the size of an egg and put him in my pocket. Then I walk into the welcoming house where Izdubar should find healing. ~Carl Jung; The Red Book

Thus my God found salvation. He was saved precisely by what one would actually consider fatal, namely by declaring him a figment of the imagination. How often has it been assumed that the Gods have been brought to their end in this way: This was obviously a serious mistake, since this was precisely what saved the God. He did not pass away, but became a living fantasy, whose workings I could feel on my own body: my inherent heaviness faded and the hot and cold way of pain no longer burned and froze my soles. The weight no longer kept me pressed to the ground, but instead the wind carried me lightly like a feather, while I carried the giant. ~Carl Jung, The Red Book