A paracosm is an imaginary or constructed world. It's meaning, literally, is "beyond-world." Many people create these worlds as a hobby, a process often called worldbuilding. The most familiar use of a paracosm is for writers (particularly fantasy authors) who craft these worlds where their characters live and stories unfold. Paracosms can be simple sketches or fully-drawn worlds of astounding detail, with their own inventive histories, societies, and mythologies. Not all paracosms involve fiction writing (some people worldbuild with no real goal or "use" in mind), but the most famous include the settings of some of our favorite stories: Oz, Narnia, Middle-Earth, and Westeros/Essos, to name a few.
I've been playing around with building the same paracosm for about ten years. I say "playing around" because I haven't really written anything substantial using the characters or historical plotlines from this world. I expect I might, someday, but I'm still fleshing out the history, characters, and mechanics of how this world operates. That's what's fun about a paracosm: I can construct it any way I like. Think of them as "playgrounds of the imagination"--where you're free to explore what if? after what if?
Trying to create an entire new reality using your imagination can be challenging, not to mention exhausting mentally. You have to decide how detailed your world will be. Will you attempt to flesh out the languages (some people even create entire constructed languages, or conlangs, for the inhabitants of their worlds)? What about the different cultures and governments? The religions and myths and celebrations? The history of the paracosm is something I struggle with: how far back in time will you flesh out this world? How far into the future? Every story you decide to tell takes place somewhere along that world's timeline and is intricately bound up in the past, so you'll have to have some inkling of what happened leading up to current events. I think it's important to hone in from time to time on specific time periods or locations in order to give your world convincing depth as well as breadth.
The past few years, I've been trying to narrow my focus to one particular part of my fictional world: a specific group of people. As of now, I know they are refugees, their homeland having been overrun by...something. I'm not sure by what, exactly (maybe invading armies, natural disasters, vengeful gods?). I'll let my imagination decide later. The remnants of that people relocate to another landmass, where they manage to found what eventually becomes a powerful maritime republic several centuries later.
I'm looking forward to the characters who start to surface--the movers and shakers--as I flesh out this fictional society. I'm in the beginning stages of creating their language, which is proving an overwhelming task. I know little about how this society's government or economy or religion would work. I have lots of research to do, but the importance behind all this worldbuilding is ensuring my stories (should I actually ever sit down and write one) and characters are interesting and believable.
All this might seem like escapism or a waste of time. I guess all fiction or any hobby could be considered that way. But this exercise of my imagination has proven reliable for years, and I'll likely keep returning to it.