It's the best attribute a child can have.
There is nothing comparable to having a wild imagination growing up. You think of something and then you elaborate on it creatively.
The healthiest form of this thought flow is asking questions. If a child's mind can't grasp a concept, it seeks the complete picture - typically from their elders. As soon as they are more informed, they continue dreaming and imagining.
If your child isn't asking enough questions, ask them for him/her. That's an easy way to ignite the mind into such school of thought.