Fiction depends upon the power of agreement!
Image we watch a Sherlock Holmes play. It only works when we accept the roles and characters in the play. If the actor called John is playing Sherlock Holmes it is no good sitting there and complaining that there is no way that John can have an assistant Watson and trying to solve the case since he is just an actor with no crime solving skills.
The fact is that we accept the rules of the play. We accept that there is a crime, accept that Sherlock Holmes is a master detective and we accept that Watson is his assistant. This is the ontology of the play and within this ontology we play along with the "logic". Of course is Sherlock Holmes decides that Watson is not his assistant, or decides that someone who was not even at the scene of the crime was the perpetrator we would argue because the play is challenging its own logic and foundations.
It all depends upon "agreement" between actors on stage and the audience that we will accept the rules of this play for its duration.
Indeed this central power of "agreement" to create fictions is of astronomical prevalance in the human world. Almost everything we do is based upon some fiction which exists because of agreement.
We agree to accept "sterling" as the unit of currency in the UK. If people studdenly stopped accepting it in favour of the Euro it no longer means anything. We might try to exchange our sterling for Euro but there must be an exchange mechanism which depends upon an agreement. If there was no agreement there would be no demand for sterling and our life's saving would be worthless. If I was to print my own "money" it would only be valuable if there was agreement that it was exchangeable. The reason that money exists is that once-upon a time it was given by the Royal Treasury in place of gold on an understanding that it could be redeemed at any time for gold. This doubled the Treasury's holding and they could fund a war of the time (nothing changes ;-). Gold of course is another thing whose value comes mostly from agreement.
The problem with agreement by itself is that it creates a "believeable" fiction. If everyone believes in God that is an immense force that makes Him seem real. If everyone believes in money that is the same. These days you are unlikely to be able to redeem your money for gold because of "fractional reserve banking" (pages on Wikipedia). A run on the bank will mean that you will have nothing. Its only by agreement and the rules of the exchange mechanism that money has its meaning and value.
Theft is the most obvious thing we can do to totally invalidate the meaning of money. If we just take things then what use is there in money? If we were to believe in a "generous society" where people gave things this simple change in rules completely destroys the Sherlock Holmes fiction of money. Power in general is the same. The Nazis were only able to do what they did because people believed in their authority and did what they were told. The same in any government, it only works because we believe it and behave as though it was real. This is the power of mass belief to create believable fictions.
Generally we believe that these fictions are based upon some substantial Reality. But actually substantial reality looks completely different. In our example consider that you can watch Sherlock Holmes on stage but you can't take him out for a meal! The real world exists outside the logic of the play. In Reality you can't take "money" or "government" out for a meal ... as is famously noted you can't eat money and I add... farmers are better than government at farming!
Substantial reality is that we were born, we live and we will die. We eat, we go to the toilet, we sleep. We get ill. We have sex. We struggle for what we need and we fight but we prefer peace and we like love.
That is actually about it for reality, just look at the animals with a small brain and they do the reality thing perfectly. The big brain enables us to create fictions that is the difference.
Some might say the big brain enables us to survive better and dominate the world. Well bacteria were here before humans, they will be around long after humans and they dominate the world in terms of biomass also (see my home page in the links) so their survival is unchallengable.
No the big brain has evolved because humans are bastards to anyone who can't play in their games. Auto-selection for big theatrical social brains. But then is evolution any more real than sherlock holmes - leave that to the reader to decide.
Buddhism has a lot more to say about all this because it would even challenge some of the things I've taken as "Real". Its like the layers of an onion (except in this analogy I'm not peeling but looking outwards to find the outer skin)
If you look around you in life you will see that everyone is totally stuck in a series of co-existing plays... pretending to be certain types of people with really important things to do, learning their lines and acting out their scripts. Yet they are not aware that it is just fiction. Terrorists are brilliant - they are acting out some mad script against a bunch of people in the West who are acting out their own mad script. Can you take a "member of the free nations" to dinner any more than you can take a terrorist? Of course not, just people reading from the same script, which is the new play called "terrorism", written by the Bush family in Afghanistan with their long time co-star the Bin Laden family. Makes great TV doesn't it ;-) bring back Reagan at least he said he was an actor!
The sad thing is that abject poverty (which is real) only exist because we believe in the system of property and exchange which keeps the rich rich. The rules of the current system have been adapted over the years to make the poor a bit richer and the rich far far richer. But its just a play and we don't have to play. Altho as commented above people are bastards if you don't play their games and so the games do infringe on reality when they threaten to kill you unless you play correctly.
Bit like Watson being told you as an actor might be able to see that it is just a play, but you must accept that I am the great Sherlock Holmes and you must play the bimbling Watson otherwise I and the rest of the cast will kill you.
Which gives me an idea for a play. Like "Rosencrantz and Guildenstern are Dead" which is an amazing play, but where the play breaks out from the inside not the outside to infect the lives of the actors. Maybe a Nazi play where the main actor starts believing that he is the character and not the actor and fiction starts to destroy reality.
A search for happiness in poverty. Happiness with personal loss, and a challenge to the wisdom of economic growth and environmental exploitation.
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