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This paper explores the historical origin of the concepts of latency in Freud's writings. Four definable and separate concepts are found to be inherent in the term 'latency' as Freud used it. Clinical material is presented that supports the concept of latency as a socially guided configuration of ego structures and the fact that during latency, drive strengths are sustained. Of the many features of latency, fantasy formation is singled out for close study. Fantasy is seen as a means of vicarious problem solving. Through fantasy, conflicts may be played out in thought rather than reality. This spares the individual a conflict with the real objects in the environment and diminishes the impact of drives to the extent that maturation and sublimation are facilitated. In this way the relative stability and the diminution of drive pressures, typical for the latency period, come into being. In later latency when maturational improvement in reality testing gradually
minimizes the effectiveness of manifest fantasy formation, there is a gradual increase in other drive manifestations. This sets the stage for adolescence.