My mind, lately, has been in my story. Rather, my character's world. She lives in a medieval-type era, in a village that is covered in January snow, and lots of STUFF is happening. I know what the inside of her hut looks like. I know what her special herb garden looks like. I know how she feels and thinks, and the amazing things that await her. And the not-so-amazing things.
I can see her entire world in my head, and I write what I see. Would people call that daydreaming? All I need to do is sit in front of my computer, put on some medieval music, and I'm THERE. And I literally have to be pulled from that place kicking and screaming (usually to a "Mommy, I need to go potty" request...) because I'm so deeply into it, I am not aware of anything else around me. And when I go to sleep at night, I've got the Alphasmart by the bed, because I'm still lingering in Her world.
Daydreaming? Or overly generous Muse? I'd like to think it's the latter.