Phantasm

Definition of -PHANTASM-

1: a product of fantasy; 

   A:Delusive Appearance; Illusion

   B: Ghost, Specter

   C: A Figment of the Imagination

2: a mental representation of a real object

http://www.merriam-webster.com/dictionary/phantasm

That being said, on a side note but related. One of my all time favorite horror films has to be Phantasm(1979). Directed by Don Coscarelli, It has become a low budget cult classic, with the emphasis on CLASSIC. 

Mike, a young teenage boy who has just lost his parents, is afraid to lose his brother. Mike cannot decide what is real and what isn't, and is plagued by vivid nightmares. He gets the shock of his life when he watches,  the Tall Man(the mortician) lift a coffin on his own. Mike decides to investigate and discovers a horrible world of bizarre happenings where the Tall Man, along with his flying spheres, shrink the dead to half their normal size and reanimate them as slaves. It is then up to Mike, his brother, and Reggie the ice cream man to stop the Tall man.

Phantasm imdb