The term means that the plot of scenes in a literary work, while imaginary, nonetheless have inner force and reflect reality in society. According to Buddhist and Daoist thought, society is transitory and shifting and people should not hold on to something unreal; rather, they should transcend delusions and recognise the true essence of things. As pointed out by literary and art critics, to gain keen appreciation of literary works and real life, people should learn to go beyond the imaginary aspect to grasp the truth of a creative work so as to enjoy its beauty. As a term in literary criticism, truth in imagination not only sheds light on the aesthetic function and significance of literature and arts, but also reveals a fundamental principle of literary and artistic creation, that is, art creation should be rooted in real life but not limited by it. Instead, it should aim at blending the truth of life and artistic imagination.

Therefore, [the author] has to describe separation and reunion, happiness and sadness in the illusory world of human life, as well as telling stories of reward for good and punishment for evil deeds, so the reader learns from it and is warned.

(Tianhuacangzhuren: Preface to Truth in Imagination)

Take the novel Journey to the West as an example… The master and his three disciples each have their distinctive personalities, manners and behavior. If you cite a certain word or action and ask people to guess who did or said it, they will know who it is. Only when there is truth in imagination, can such a life-like effect be achieved. (Shuixiang Jushi: Preface to Amazing Stories, Vol. Two)