Power Fantasy

"You're sorta stuck where you are,
But in your dreams, you can buy expensive cars,
Or live on Mars and have it your way.
And you hate your boss at your job,
But in your dreams, you can blow his head off.

In your dreams, show no mercy."

—The Flaming Lips, "Bad Days"

Sometimes people can be really mean to you. The Jerk Jock and the Alpha Bitch will mock you in school, the Sadist Teacher and Obstructive Bureaucrat won't leave you alone, the vile new boss can turn your beloved workplace into hell on earth. Even your parents can hurt you. And sometimes your whole city will hate you for some reasons. And you know what the worst part of it is? You can't take revenge. You can't tell your boss what you really think about him, unless you want to lose your job. Standing against the bully will just get you a serious beatdown for your trouble. And how the hell are you going to fight with the whole town? Sometimes the only thing you can do is give in to your imagination and indulge yourself in a Power Fantasy. Because there, you can be anyone -- The Chosen One, a Superhero or just Badass with a cool longcoat. And everyone who ever pissed you off will have to pay. You can give villains the faces of your abusers, or just imagine them being beaten by you or your avatar.

The Sliding Scale of Idealism Versus Cynicism shows two possibilities of this trope played seriously. In more cynical settings, a person stuck in this situation will never get to stand up against his abusers, always living under their heel and either will become a completely broken person as time passes or just cracked up. In more idealistic settings that person will at some point stand against those who turned his life into a living hell, either verbally or with fists.

Sometimes, this can be played for laughs: Sam pissed off Bob and Bob imagines himself beating the tar out of Sam, but this was just a separate incident—Sam and Bob are friends, or at least don't have a reason to hate each other.

Most definitely Truth in Television. See also I Just Want to Be Badass; arguably the same basic desire.

Examples of Power Fantasy include:

Advertisings

Jim has one in this Progressive commercial.
The Trix Rabbit had this in one commercial, dreaming of a world where he lords over those mean and selfish kids who wait on him with his favorite cereal. Unfortunately, he is woken up and brought back to reality by those same kids. "A rabbit can dream, can't he?" he blissfully says.

Anime and Manga

Isao Kako in Bokurano has a disturbing dream in which he takes revenge on everyone who was mocking him, including beating up his older sister alongside two bullies and trying to rape the Alpha Bitch.
The black suit of armor from After School Nightmare embodies this trope; in the dream world, it acts for the real-world character as a way to do this in dreams.
One episode of Ghost in the Shell: Stand Alone Complex involves Section 9 looking into the daydreams of a refugee from the last world war who fantasized about killing his boss and rescuing the girl as an escape from his mundane life as a helicopter pilot and society at large. The episode itself is an homage to Taxi Driver, but in the end it is concluded that the man poses no actual threat to society, and that his daydreams are just that.

Comic Books

The entire Superhero genre has been described by some as "adolescent male power fantasy".
In one storyline, Superman has a particularly realistic dream; once he figures out it isn't real, he uses it as an opportunity to vent by massacring the villains who keep coming back.
At the end of Youngblood: Judgement Day it's revealed that all Darker and Edgier state of Image Universe and his own power and position are Sentinel's Power Fantasy turned into reality.

Film

In Brazil Sam Lowry dreams of being a winged hero as a means of escape from his bureaucracy-filled dystopian world.
An alternative interpretation of the Happy Endings of both Taxi Driver and The King Of Comedy (both of which were made by Martin Scorsese and star Robert De Niro) is that they occurred all in the protagonists' heads.

Literature

The short story The Secret Life of Walter Mitty by James Thurber is all about this.
Holden Caulfield in The Catcher in The Rye after the pimp beats him up.
Shredderman Rules is all about this trope.

Live Action TV

Anna Anaconda
Lt. Barclay does this in his first appearance on Star Trek: The Next Generation but unlike most other examples he has the holodeck to make his power fantasies reality.
TV adaptations of Shredderman Rules, which are for the most part faithful to the book.
The iconic "Lumberjack Song" from Monty Python's Flying Circus was this, at least the original skit.

Newspaper Comics

Calvin and Hobbes is probably the most iconic example of this, and only Calvin has three different instances—Spaceman Spiff (which provides the header picture), Stupendous Man, and Tracer Bullet—of this trope as major recurring characters, plus other fantasies of being a dinosaur.
- There's also the strip where Calvin fantasizes about being an all-powerful, sadistic god who enjoys tormenting the denizens of his little world. The final panel reveals that he's playing with Tinker Toys.

Tabletop Games

Arguably most tabletop role playing games. Most of these games let you play some larger than life character doing heroic things. Though there are occasional subversions such as Paranoia. The Munchkin is an example of someone who lets this desire overcome their sense of fairplay (except those that simply confuse all game with bowling).

Web Comics

Played for laughs in Weregeek—after having an argument with his boss, Mark imagines him being attacked by his Dungeons & Dragons character.
Sonichu is an unpleasant combination of this and Life Embellished. If the author has a problem with you in real life, a thinly-veiled version of you is going to show up and get beaten up.
Lewis from Full Frontal Nerdity mentioned once he was imagining himself getting Superman's or Phoenix's powers and use them to kill Jerk Jock that was mocking him in High School and not only win the heart of his Love Interest from that times but get her admitting he is a God.
Taken to absurdly literal levels in Problem Sleuth, where most of the plot takes place in the imaginary world. As such, anything the characters can imagine manifests physically.

Western Animation

Kung Fu Panda: "We should hang out." "Agreed."
Done hilariously in Justice League Unlimited. When Dr. Milo, a high-ranking Cadmus employee, is told by his boss (Amanda Waller) he's fired, he at once pulls out a huge laser cannon and kills everyone else at the conference table. Of course, it's a fantasy and in real life he just meekly takes his pink slip before releasing Doomsday as payback.
In the Fairly Oddparents, Timmy Turner has created so many imaginative alternate personae that the rest of the town starts asking him which one he is each day when they notice he's not looking or acting like his usual self.
Ron has one in an episode of Kim Possible; he's dozing while taking a break while volunteering at the hospital, and dreams he has to perform a brain transplant on Kim to save her from "brain frost". Unfortunately, the real Kim wakes him up and he has to go back to changing bedpans.

Real Life

Prior to emancipation, American black slaves told stories about Brer Rabbit outwitting Brer Fox and Brer Bear as a way of fantasizing about turning the tables on their white tormentors.
The philosopher Bertrand Russell dismissed Friedrich Nietzsche's entire body of work as mere "power phantasies".