Mental Story

A story where what's going on in someone's head - be it their Dream World, Mental World, imagination, inner struggles, conversations with their Imaginary Friend, or power fantasies is the main attraction, with not all that much happening in "reality."

Sometimes, the focus will be on mundane events in Real Life represented as all kinds of metaphorical weirdness playing out in the characters' minds.

A Mr. Imagination will usually be the protagonist, unless the story revolves around seeing or entering other peoples' dreams, which is a major Sub-Trope, although one we don't have yet.

All Just a Dream and Dying Dream are Sub Tropes, but they are not this trope. Do not list examples that belong under those two tropes on this page. They have their own examples sections.

Examples of Mental Story include:

Anime and Manga

Paprika
Yumekui Merry
Welcome to The NHK is mostly about the main character's inner strife, and no decisions are reached even in the end.
Onani Master Kurosawa is a little more plotty, but it's still mostly Kurosawa's head.
Umineko no Naku Koro ni combines this with Nested Story Reveal in Episode 8 -- most of the plot is Toya Hachijo attempting to recreate the events of Rokkenjima 1986 as mystery novels in order to speculate on what happened on the island.
Neon Genesis Evangelion dips into this as the series progresses and everyone's mental stability comes crashing down. The original ending became this due to the budget running out. Finally, about 30% of End Of Evangelion is entirely this. It must be seen to be believed.

Film

Quite a bit of Inception happens in someone's head. Not always the same someone.
Fight Club is this in large part, but some interesting stuff happens in reality, too.
Shutter Island
Brazil, partly.
Sucker Punch
Possibly also Source Code.
Akira Kurosawa's Dreams, technically.
Identity is also a spoiler-example, as it's presented as being weird events happening in the real world until the reveal.
A Beautiful Mind
Unfaithfully Yours: An orchestra conductor who thinks his wife is unfaithful to him. We see him take revenge on her and her lover - which turns out to be a very long Imagine Spot type sequence he thinks of while conducting. He then tries to execute his plan, which doesn't work nearly so well.
A significant chunk of Being John Malkovich takes place in Malkovich's head.
Eternal Sunshine of the Spotless Mind is kind of a subversion, since although we see them from the main character's perspective via Flashbacks and Imagine Spots, most of the events in the story really happened.

Comics

In Calvin and Hobbes, even leaving aside the question of whether or not Hobbes is real, a lot of stories take place in Calvin's imagination.
"The Tick vs Proto-clown"

Live Action TV

Herman's Head
Nearly all the events of the Scrubs episode "My Life In Four Cameras" take place in JD's head. Only the Book Ends are real.
Roseanne's final season turned out to be a book that Roseanne was writing.
Stargate SG-1 - "Avatar" takes place in a virtual-reality scenario that's effectively going on inside Teal'c's head.
Stargate Universe - "Seizure"
Stargate Atlantis - In "The Real World", the main characters apparently manage to return to Earth, but it's actually an illusion of Earth fabricated from the memories in their heads.
Fringe - "Lysergic Acid Diethylamide"
Farscape has a few episodes like this.
- "Revenging Angel" is a Two Lines, No Waiting episode. One plot is about D'Argo, Chiana, and Jool trying to stop D'Argo's ship from self-destructing, while the other plot takes place inside Crichton's head as he's lying in a coma (and is a Looney Tunes pastiche).
- "John Quixote" takes place in a virtual-reality game based on Crichton's memories.

Literature

James Thurber's "The Secret Life of Walter Mitty"
Arguably the philosophical book Sophie's World, with the mains realizing that they are only fictional characters within a book (within another book) and undergoing an existential crisis because of it.
The Philip K. Dick novel "Eye in the Sky" takes place in a sort of shared mental world, with the current most-dominant personality warping it to their prejudices and worldview.

Literature

The Pilgrims Progress takes place entirely in two dreams (one for each part) by the narrator.
- On a similar note (due to it being essentially fan-fiction of the previous example), the short story "The Celestial Railroad" was a dream, but I can't remember whether it was only revealed at the end or not.

Video Games

Braid
The Company of Myself
Hitman: Contracts, until the final mission.
Psychonauts
American McGee's Alice and, to a slightly lesser extent, Alice: Madness Returns both take place largely in Wonderland - in this case, the corrupted Happy Place of a catatonic girl who blames herself for the death of her parents.
Yume Nikki is about a hikikomori lucid dreamer, whose primary interaction with the products of her subconscious is to stab them with knives.