The power of imagination gives man the power to create what Sri Aurobindo & The Mother refer to as “formations”. These formations have their own powers and perils as explained here.
The Mother speaks on mental formations
Man has an extraordinary power of creation. He has created a whole set of godheads in his own image, having the same faults as himself, doing on a bigger scale, with greater power whatever he does. These beings have a relative existence, but still it is an independent existence, just like your thought. When you have a thought, a well-made mental formation which goes out of you, it becomes an independent entity and continues on its way and it does that for which it was made. It continues to act independently of you. That is why you must be on your guard. If you have made such a formation and it has gone out, it has gone out to do its work; and after a time you find out that it was perhaps not a very happy thing to have a thought like that, that this formation was not very beneficial; now that it has gone out, it is very difficult for you to get hold of it again. You must have considerable occult knowledge. It has gone out and is moving on its way Supposing in a moment of great anger (I do not say that you do so, but still when you were in quite a rage against someone, you said: “Ah! couldn’t some misfortune befall him?” Your formation has gone on its way. It has gone out and you have no longer any control over it; and it goes and organises some misfortune or other: it is going to do its work. And after sometime the misfortune arrives. Happily, you do not usually have sufficient knowledge to tell yourself: “Oh! It is I who am responsible”, but that is the truth.
Note that this power of formation has a great advantage, if one knows how to use it. You can make good formations and if you make them properly, they will act in the same way as the others. You can do a lot of good to people just by sitting quietly in your room, perhaps even more good than by undergoing a lot of trouble externally. If you know how to think correctly, with force and intelligence and kindness, if you love someone and wish him well very sincerely, deeply, with all your heart, that does him much good, much more certainly than you think. I have said this often; for example, to those who are here, who learn that someone in their family is very ill and feel that childish impulse of wanting to rush immediately to the spot to attend to the sick person. I tell you, unless it is an exceptional case and there is nobody to attend on the sick person (and at times even in such a case), if you know how to keep the right attitude and concentrate with affection and good will upon the sick person, if you know how to pray for him and make helpful formations, you will do him much more good than if you go to nurse him, feed him, help him wash himself, indeed all that everybody can do. Anybody can nurse a person. But not everybody can make good formations and send out forces that act for healing.
The Mother, Questions and Answers (1953): 1 July 1953
Sri Aurobindo in letters to various disciples
In each plane there is an objective as well as a subjective side. It is not the physical plane and life alone that are objective.
When you have the power of formation of which I spoke, whatever is suggested to the mind, the mind constructs and establishes a form of it in itself. But this power can cut two ways; it may tempt the mind to construct mere images of the reality and mistake them for the reality itself. It is one of the many dangers of a too active mind.
You make a formation in your mind or on the vital plane in yourself – it is a kind of creation, but subjective only; it affects only your own mental or vital being. You can create by ideas, thought-forms, images, a whole world in yourself or for yourself; but it stops there.
Some have the power of making consciously formations that go out and affect the mind, actions, vital movements, external lives of others. These formations may be destructive as well as creative.
Finally, there is the power to make formations that become effective realities in the earth-consciousness here, in its mind, life, physical existence. That is what we usually mean by creation.
Sri Aurobindo, Letters on Yoga – II: Experiences and Realisations – II