Meaning: The group of people employed their ability to form mental images and ideas in order to bring written narratives into existence.
Choice of Words: We is a pronoun referring to a group of people. "Used" is a past tense verb meaning to employ something for a particular purpose. "Our imaginations" refers to the ability to form mental images and ideas. "To create" is a verb meaning to bring something into existence. "Stories" is a plural noun referring to multiple written narratives.