Seeing that Tolkien planned very little when writing, I think that he conceived fantasy as some sort of "lucid" dreaming.
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I'm sure Tolkien himself had some form of PTSD after his war experience as he certainly understood the torments you can go through - recurring dreams, a 'doomy' outlook, fascination with fantasy etc.
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I agree; he does reffer to "mental suffering" in a letter to his son, thanking him for being such a great support.