I do this a lot myself. Me being a hero or rock star or being somehow involved in a major news story where I am the center of attention. Eg. saving someone from a burning building or helping bring about peace in the middle east

Ive done a little bit of research and I am unclear about when its considered a major problem. Some web sites say some people will invent unique fictional characters like in a book, giving them names, occupations, special facial feature etc. Also they will sort of zone out and prefer to be with their daydreams. Choosing their daydreams even over other pleasant events. Also they may have rhythmic body movement like rocking back and forth.

I don't do that.For me its more coming up with certain situations that may or may not involve people I know or strangers (mostly admiring me or sometimes challenging me). I don't assign or invent special details about the people or situations etc.

I think a lot of it has to do with low self esteem and loneliness. I also ruminate about past or future events. Replaying what I will do or what I should have done etc. This aspect is always triggered and made worse when under stress. When under extreme stress I will start worrying about my worrying and what I am thinking.( I guess sort of like OCD type thinking) If that happens it make me feel very depressed and down about myself in general.

I guess it is a bit comforting to know that other folks do it also so I dont feel quite as weird.