It's often used to describe ideas or beliefs not based in reality, emphasizing their lack of substance. His theory about time travel was a figment of his imagination.
Pro Tip 2/3
Expressing Doubt
Use it to express skepticism about the reality or truth of something someone else mentions. Are you sure that's what happened, or is it a figment of your imagination?
Pro Tip 3/3
Emotional Impact
When used, it can imply that someone's feelings or fears are not justified because they're based on fiction. Her worries about the monster under the bed were simply a figment of her imagination.