In order to discuss this topic, I would like to put the main focus on lucid dreaming. How do we distinguish what we see to what we “see” when we dream? How we see things in real life is not just through perception, but you create the final image of being through the other senses, such as smell, hearing, taste, just as much as seeing. For example, when we dream you cannot know, unless you have mastered lucid dreaming, that what is going on, is in fact, a dream.
When you know the technique of lucid dreaming you have control over your dream, and over that “parallel universe” that is supposed to represent a different world from the real one. You create the scenery, you define yourself, and you choose who and what is happening in it.
If we look at the rational side of the answer to this question, it would seem quite easy to truly answer it, but the problem is how to explain what actually is going in your head during dreaming and well, living, when it is acknowledged that we can very easily fool our senses to make what is going on, believable.
The dream is like an idea, it all starts in your mind, the difference being, you can create a whole new world with the dreams.
The very visible difference between reality and dreams is where the saying of pinching each other to know if something is real came from.
We all know that no matter how realistic the dream looks and even feels, pain and other emotions are felt quite differently from every day. No matter how perfect something is, the observation of details will help you and guide you to the realization that something is not what you might think it is. The same applies to the dream. You observe, and you always sense if something is not as it is supposed to be. This is where the ways of knowing kick in: Reason, as well as perception, and emotion can be quite helpful as well.
Our ways of knowing, are the path showing us how to distinguish on what is real and what is not, because in the other case, we will be stuck in a limbo place between reality and dreams, where you won’t be able to live truly and fulfill your intrinsic goals and values and your mind will be stuck in a lucid environment, where the true goal of life would be to find and prove something and someone’s reality.