One of our main struggles in our generation is that of imagination, m’dameh. We must realize that imagination only has power in the realm of physical action, in which it can confuse us, and this is where it must be refined. The main attachment of the forces of evil is in this World of Action, since the main attachment of these forces of evil is through the power of imagination. This corresponds to nogah, which corresponds to the Tree of the Knowledge of Good and Evil, which is attached to physical action.
The power of imagination functions as an intermediary between the physical and spiritual, between body and soul. All things in the physical world can be envisioned in the mind, and this is the power of imagination. We must understand that the main test and free choice of each of us is specifically in the power of human imagination, which can rise up with the desires of the soul or descend with those of the body.
The reason it is important to refine our imagination is because imagination is associated with emuna (faith in Hashem). In matters which our intellect comprehends, emuna does not apply. However, when we are faced with a situation in which our logical reasoning does not have an answer, there we must rely on emuna.
Emuna is rectified through Torah which has been faithfully transmitted by true tzaddikim. Perfected emuna is the gateway to intellect — to knowing and recognizing Hashem. Emuna is perfected through rectifying imagination, and it is only by means of imagination that we can approach the intellect.
When we accept the Torah which has been faithfully transmitted to us by tzaddikim, this perfects our emuna, which rectifies our power of imagination, which then protects our intellect so we can truly know and recognize Hashem. Without rectifying our power of imagination, we can easily be misled into heresy and false beliefs, as so many have done.
This explains why one of our greatest struggles in this generation is in the realm of imagination. If we do not rectify the power of imagination, we will be unable to truly know and recognize Hashem, and can be easily led into heresy and false beliefs. And the only way to rectify our imagination is by perfecting our emuna through Torah.
Likutei Moharan II, 8:7-8 by Rebbe Nachman and Likutei Halakhot, Orach Chaim, Hilkhot Bikat HaReyakh 4 by R’ Natan.