Fantasy in use with old novel (8)
I believe the answer is:
delusion
'fantasy' is the definition.
(thesaurus)
'in use with old novel' is the wordplay.
'with' says to put letters next to each other.
'novel' indicates anagramming the letters (letters in a new or novel order).
'in'+'use'='inuse'
'inuse' put after 'old' is 'oldinuse'.
'oldinuse' anagrammed gives 'DELUSION'.
(Other definitions for delusion that I've seen before include "Mistaken belief in the face of contradictory evidence" , "Misapprehension" , "Misconception - deception" , "Fallacy" , "False or mistaken belief" .)