Fancy was used interchangeably with imagination in the eighteenth century but during the Romantic period came to signify the faculty of arranging ideas and images in pleasant combinations, as opposed to imagination which was more profound, intellectual and radically inventive.
Editors. "Fancy". The Literary Encyclopedia. First published 01 November 2001
[http://www.litencyc.com/php/stopics.php?rec=true&UID=375, accessed 22 December 2014.]