Definition
An imagined order is a system of shared beliefs — laws, money, religions, nations, corporations, human rights — that has no existence in the physical world but successfully coordinates the behavior of large numbers of Sapiens. You cannot find a dollar, a constitutional principle, or a corporation under a microscope. They exist because, and only because, enough people behave as if they exist.
Harari uses the term to break a habit. Modern people tend to draw a sharp line between 'fictions' (gods, myths, totems) and 'realities' (money, law, the state). For Harari, the line is meaningless. All of these are equally absent from physical reality and equally dependent on collective belief. The difference is not in kind but in which fictions a given society has chosen to commit to.
Why it matters
How it works
Three properties make an imagined order durable. It is embedded in the material world — currencies are printed, laws are inscribed in stone or stored in databases, religions occupy buildings, schools train the young in the assumptions of the order. It shapes desire — people raised inside it want what it teaches them to want, and so cannot easily imagine an alternative. And it is inter-subjective — it does not depend on any one believer; it persists in the network of all believers, so any individual's defection is absorbed without disrupting the order.
To overturn an imagined order, an alternative imagined order has to be available to switch to. Pure disillusionment is not enough. This is why revolutions tend to replace one set of shared fictions with another rather than dissolving fiction altogether.