Creation of reality takes place everywhere in society, both today, and in 1984. Reality can easily be created. Reality is usually created to sway or alter the public opinion. The creation or alteration of reality can have both positive and negative effects.
The creation of reality in 1984 is so flagrantly done. The party uses it's power to fabricate any reality that it thinks is the best for the party. The best example of this, is
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thing (eg. surgical strike, or ethnic cleansing.)
There are both positive and negative effects of created reality. In 1984 the altering of the news makes the citizens of Oceania feel like that there is no bad news. This makes the people happier, and happy think that the government is doing a good job. The creation of a war, or an enemy will unite people against the common enemy, and the general public will be even happier.