We referred to "Nancy's Imagination" as the fantasy places where Nancy comes when she is daydreaming and it changes according to the context of the episode.
Usually, when an episode features them, the background changes from 3D to 2D animation; and according to Jamie Mitchell --director and executive producer of Disney Fancy Nancy, that represents the way she draws her biggest dreams.
Nancy's PlayPalace (Chez Nancy):
Nancy comes when she is imagining how fancy will be her new playhouse.
Description: A fancy mansion with all the stuff she wants in her new playhouse; Nancy gives us the welcome and describes it as very (très) fancy place.
Queen's Tea Room (School de Fancy):
Nancy imagines how magnificent (magnifique) would be if her friends learn to be fancy.
Description: A tea room which corresponds to the Queen's castle, it has chairs surrounding a table; Nancy shows the Queen what she taught them.
Tea Party (Tea Party Trouble):
Nancy is imagining how will be the tea party that she will have with Bree.
Description: A large table with vegetation surrounding it, the table has many snacks and decorations; Nancy and Bree are having a tea party, and Bree praises Nancy for the great job she did.