fancy

First recorded in 1400–1450; Middle English fan(t)sy, syncopated variant of fantasie fantasy

9. Fancy, fantasy, imagination refer to qualities in literature or other artistic composition. The creations of fancy are casual, whimsical, and often amusing, being at once less profound and less moving or inspiring than those of imagination: letting one's fancy play freely on a subject; an impish fancy. Fantasy now usually suggests an unrestrained or extravagant fancy, often resulting in caprice: The use of fantasy in art creates interesting results. The term and concept of creative imagination are less than two hundred years old; previously only the reproductive aspect had been recognized, hardly to be distinguished from memory. “Creative imagination” suggests that the memories of actual sights and experiences may so blend in the mind of the writer or artist as to produce something that has never existed before—often a hitherto unperceived vision of reality: to use imagination in portraying character and action.

Fancy is a 15th-century contraction of fantasy or phantasy. Fantasy comes from Old French phantasie, fantasie “imagination, imaginative faculty, a work of the imagination,” which in turn comes from Late Latin phantasia “idea, notion, fancy, imagined experience or set of circumstances, mere fancy or semblance.” In the Vulgate (the Latin version of the Bible, prepared chiefly by Saint Jerome at the end of the 4th century), phantasia also means “apparition, phantom.”
The original meaning of fancy, “individual preference or liking, arbitrary inclination,” as in “to take a fancy to someone,” was only one of several meanings of Middle English fantasie, a technical word in the psychology of scholasticism (the system of theological and philosophical teaching and disputation predominant in the Middle Ages, based chiefly upon the authority of the Bible, of the church fathers, and of Aristotle and his pagan, Christian, Muslim, and Jewish commentators).
The adjective fancy, meaning “fine, ornamental,” did not appear until 1753; it developed from attributive use of the noun in the sense “designed to please the taste or fancy.”