Patañjali's yogasūtra 1:9 Vikalpaḥ

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शब्दज्ञानानुपाती वस्तुशून्यो विकल्पः 

Śabdajñānānupātī   vastuśūnyo  vikalpaḥ

शब्द ज्ञान अनुपाती वस्तु शून्यः विकल्पः 

[An image] conjured up by words without any substance is fancy/fantasy

शब्द - sound, word; masc. noun  

ज्ञान - knowledge, cognizance; neuter noun

अनुपाती - following upon

वस्तु - thing, object; neuter noun

शून्यः - empty [of], nothingness; masc. noun

विकल्पः - fancy, fantasy; masc. noun

Vikalpa refers to things our mind makes up, and has no correspondence with reality, or actual experiences.  It is not based on past experience, because then it would be in the realm of memory. It is purely a creation of the mind, following words.  When I say mermaid, centaur, gingerbread house, the vritti in your mind is vikalpa. When you read The Hobbit, the mental images that get created in your mind are vikalpa. The little people in Gulliver's travel are vikalpa. To be vikapla, a vritti has to meet two conditions - it must be something conjured by words [a description] and it does NOT exist in reality.

Please also note, that vikalpa is used in regular language to mean choice, option and indecision - and that the sense of fantasy  only arises when it is used as a technical yogic term.