Omnium says:
Fowler seems to suggest that the word you are looking for is "delusion": "A delusion is a belief that, though false, has been surrendered to and accepted by the whole mind as the truth, and so may be expected to influence action." He defines "illusion" as "an impression that, though false, is entertained provisionally on the recommendation of the senses or the imagination, but awaits full acceptance and may be expected not to influence action."

Although it may seem like I'm splitting hairs here, the idea that you say Fowler is talking about here is not really what I'm looking for. Remember that I want a word that captures the idea that it doesn't matter whether what the person believes is actually true or false, simply that it is something they believe because they WANT to believe it. THIS is how Freud makes use of the word.