: Is it a bad idea to have a character that has an "imaginary friend"? In a story I'm working on, I'm adding a side character to travel with the two main characters because I realized I didn't

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Tell the reader directly

You did not mention the point of view of your story. If you are taking a third-person omniscient point of view, you can tell the reader directly that this is only in the person's head with no outside existence. You can time this revelation for maximum effect in the story, whether that means revealing it early to avoid ambiguity or towards the end as something of a twist.

Have the character realize it eventually

This is somewhat similar, but works better with more limited points of view. If the character eventually realizes it, then the readers will know. This could serve as an interesting development for the character where they have to grapple with the fact that their companion has no independent existence.

Have other characters express doubt or reasons for doubt

While it would leave room for interpretation you can readily have other characters question your main character's sanity when they mention or imply the existence of the other being.

That may not prove to your reader that the imaginary friend is all imaginary. Particularly in the horror genre the fact others question the sanity of a main character because of a real but hard to believe event is a staple. Occulus does this remarkably well in a film.

But if the other characters question it and there is no firm revelation that it is real the readers are likely to assume it is not real.

You may want to leave it ambiguous

Also, remember that ambiguities in fiction do not always detract from the story. They are often created deliberately with unreliable narrators.

Perhaps the amount of time spent clarifying the situation for the reader is zero and the reader is left to make up their own minds or to wonder. This can work especially well if you are considering a sequel or series as it leaves one more thing to be potentially tied up in subsequent stories.

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If you want your character to be cognizant of the fact they're speaking to an apparition, have them directly acknowledge that:

Why should I trust you? I know you're not real.

If you don't want your character to know (or believe) that they're talking to someone non-existent, you can have one of the two other main characters point that out.

Who are you talking to? That chair next to you is empty.

You could even do both, if you want to help provide this character credibility that they're not completely insane (aside from the fact that they converse with something imagined).

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Where there's smoke there's fire

I concur with @Andrey that "dispelling" the magic in a fantasy setting is nearly impossible. Reader will always have doubt (or hope) that this imaginary friend will turn real.

You can do two things:

Make an established theme of your world that some people think they
have a magical connection while in fact they don't;
Unless your character is bad, provide some form of redemption for
her. It wouldn't feel right to the reader if she stays just a poor
delusional muggle through the end.

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The film Harvey sprang to mind as I read your question. For most of the film, it is assumed that the James Stewart character is delusional since he keeps company with a six foot invisible rabbit.

His sister decides it is time to have him committed since his delusions and general reputation for pleasant insanity are adversely affecting her daughter.

The MC is certain Harvey is real and treats him as though he were. He opens doors and holds them open so Harvey can pass through. He orders beers for two and chats amiably with someone not there. Other characters have diverse opinions on the existence of Harvey but conclude since the MC is doing no harm it doesn’t matter.

Your characters could have a similar response to your MC chatting with air. Whether the being is a figment or not can be left to the reader. It might be intriguing if he were real but had to contend with the MC’s belief in his nonexistence.

If the being is imaginary, knowledge is limited to what the MC knows as a figment cannot know things that the one whose delusion creates him does not know.

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In a magical setting you can never prove that an evil spirit is not real. Even if you have a "voice of absolute truth" character state that he is not, the audience is most likely not going to believe them.

Wheel of Time spoilers

In Wheel of Time there is much debate on if Rand is crazy, sees a ghost, or has ancestral memories or past life memories. This is never resolved 100%. At some point he just comes to terms with the fact that it is part of him.

So my advice is, don't worry about it. Let it be a mystery, just one more part of this mysterious setting you are creating. What's important is how you resolve it. Does the spirit go away from an exorcism? Does a wizard cast a spell to drive it out, or maybe instead to heal the mind? Or does the character themselves come to terms with that the spirit is not real. This is what will tell you reader how to feel. Maybe you will surprise some with the resolution, but it is much better than feeding the reader chewed up absolute facts.

Side note
I had a novel where my character thought he could speak to aspects of an evil artifact he carried around. Instead it turned out that the artifact was just slowly driving him mad but itself was in no way intelligent. These were both magical causes and almost seem the same at first, but the big point was that the aspect could not know anything that the character did not. It was not helpful, just hurtful. And that was at least in my mind, a fun reveal at some point in the story.

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If you want skepticism from your readers, project skepticism through other characters

If a character is imagining she's seeing an evil spirit, and is talking about it to everyone, most everyone else will naturally call her crazy. Let this natural reaction give the reader cues as to how to interpret the behavior.

Or have her secretively share (because she realizes most people are skeptical), and have the one she shares the secret with react naturally.

If your story has no other cues that supernatural things are real, other than a single (erratic) character's assertions of her personal experience, most readers will naturally assume that it's her, and not the universe of the story. Just be sure to also characterize her in a way that it's believable that she IS persuaded that her own irrational whimsy is real.

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