This article examines the psychology of apparently groundless threats issued by authority figures, and explores the role played by creative imagination as a countermeasure, along with its limitations, in Dickens’s fourth novel, The Old Curiosity Shop (1841–42). The casual yet imaginative Dick Swiveller’s reference to the crime of threatening others in the novel invites psychological analysis of threats in the context of the Victorian zeitgeist and social trends. The first section delves into the unwarranted threats made by Quilp, the most imaginative villain in Dickens’s work. These threats appear to be motivated by little more than schadenfreude, a concept associated with Bentham’s hedonistic utilitarianism, which had a significant influence on early Victorian society. However, a hidden reason for Quilp’s threats is an unconscious desire to displace negative personal characteristics, such as weakness and cowardice, onto external targets through a kind of verbal projection. The second section analyzes the baseless threats against individuals in working-class entertainment by Miss Monflathers, a middle-class female headmistress on the side of authority. It also demonstrates how the sense of superiority that the female principal derives from identifying with her favorite pupil, a baronet’s daughter, is intricately tied to her underlying anxiety and feelings of inferiority. These sentiments, born from the fact that the daughter lags behind both in intelligence and appearance compared to the motherless and economically disadvantaged pupil teacher, drive her to maintain a façade of control through threats of expulsion from school. The third section investigates the possibility that Dickens’s fictional world of arts and entertainment that relies on creative imagination contrasts with the Victorian society that is full of vanity and affectation. A paradox will be identified in Dickens giving a unique imagination to Dick Swiveller, who is sloppy with money, to satirize Victorian people tainted by greed, suggesting that there is truth in the fantastical fictions created by positively conceived imaginative characters.