1
general::
Interpreting matters as one would like them to be, as opposed to what they really are. For example, Matthew wanted to be a basketball player, but with his height that was wishful thinking. This term comes from Freudian psychology of the mid-1920s and soon began to be used more loosely.
American Heritage Idioms
2
general::
Phrase(s): wishful thinking
believing that something is true or that something will happen just because one wishes that it were true or would happen. • Hoping for a car as a birthday present is just wishful thinking. Your parents can’t afford it. • Mary thinks that she is going to get a big raise, but that’s wishful thinking. Her boss is so tight with money.
McGrawhill's American Idioms And Phrasal Verbs