"What is fantasy?"

The following passage is my translation from the Spanish translation of Serbian writer Goran Petrović's Atlas descrito por el cielo (a fine book that I wish were available in English translation so many of you who crave Borgesian-style writings might enjoy this as well):

"With fantasy?" questioned Esther. "What is a fantasy? The same as an illusion?"

"Not precisely. Fantasy is something that exists, but to many it seems that it doesn't. With illusion occurs the opposite, it is something that doesn't exist, but many believe that it does," answered Dragor in detail.

Do you agree or disagree with Petrović's charcter's response in regards to fantasy and illusion? Why or why not?