In his Biographia Literaria (Chapter 13) Coleridge wrote the following on the IMAGINATION or ESEMPLASTIC power:
The IMAGINATION, then, I consider either as primary, or secondary. The primary IMAGINATION I hold to be the living power and prime agent of all human perception, and as a repetition in the finite mind of the eternal act of creation in the infinite I AM. The secondary I consider as an echo of the former, coexisting with the conscious will, yet still as identical with the primary in the kind of its agency, and differing only in degree, and in the mode of its operation. It dissolves, diffuses, dissipates, in order to recreate; or where this process is rendered impossible, yet still, at all events, it struggles to idealize and to unify. It is essentially vital, even as all objects (as objects) are essentially fixed and dead.

FANCY, on the contrary, has no other counters to play with but fixities and definites. The fancy is indeed no other than a mode of memory emancipated from the order of time and space; and blended with, and modified by that empirical phenomenon of the will which we express by the word CHOICE. But equally with the ordinary memory it must receive all its materials ready made from the law of association. ***Capitals and Italics as in the original text***
Coleridge conceives God's creation to be a continuing process, which has an analogy in the creative perception ("primary imagination") of all human minds. The creative process is repeated, "echoed," on still a third level, by the "secondary imagination" of the poet, which dissolves the products of primary perception in order to shape them into a new and unified creation--the imaginative passage or poem. The "fancy," on the other hand, can only manipulate "fixities and definites" that, linked by association, come to it ready-made from perception. Its products, therefore, are not re-creations (echoes of God's original creative process) but mosaic-like reassemblies of existing bits and pieces.