What is the role of dreams in The BFG? What ideas does Dahl convey about the real world through the use of dream imagination?

Dreams are something that cannot be understood. The BFG explains this to Sophie several times throughout the book. When BFG is mixing up the perfect dream for the Queen to explain the giant situation, Sophie gets confused by the process.

"'It's all a bit beyond me,' Sophie said. 'Dreams is full of mystery and magic,' the BFG said. 'Do not try to understand them." (128)

This is just one of many things that the BFG and Sophie discuss in which the BFG tells Sophie that it's fine if she doesn't understand everything.