The history of fantasy/the imagination in the European tradition from Plato to Kant is marked by a confinement of this capacity as well as of its creation by reason and knowledge. This phenomenon encompasses the theological condemnation of the imagination and its philosophical distinctions as well as the poetic play with transgressions, which, however, imply an acceptance of the limits of the rational. A liberation and unleashing of the imaginative faculty became possible but in the wake of the post-modern perspectives on and an openness towards forms of alterity, which had been excluded from traditional hermeneutics. In this context the seminal works of Foucault, Deleuze and others, especially Castoriadis became crucial. The latter subverts the traditional hierarchy, insofar as he presupposes a fundamental ontological radical imaginary which he defines as alterity, as a process of perpetual change and transformation. This faculty is complemented by the actual imaginary on the level of rational treatment. On the whole, the scenic and imaginative integration or embedded-ness of the subject and the institution remains crucial. Thus the persistent controversies about the relations between the symbolic and the imaginary can be further explored and illuminated. The explicit aim of this essay is the attempt to illustrate this with reference to the late medieval mystery play.