Yōga Sūtra 1.09

शब्दज्ञानानुपाती वस्तुशून्यो विकल्पः।

śabdajñānānupātī vastuśūnyō vikalpaḥ।

[शब्दज्ञान अनुपाती वस्तुशून्यो विकल्पः।
śabdajñāna = knowledge from words; anupātī = obtained when followed in sequence; vastuśūnyō = even though object does not exist; vikalpaḥ = is imagination;]

Vikalpa is inferred knowledge through words in the absence of actual object.

When we hear a story or watch a movie we imagine the sequence of events taking place in front of us, though in reality neither object exists nor events happen.