That the world is a dream is all right from the standpoint of the ultimate Reality, Brahman. Till we realize that, however, the world continues to be real; the waking state is real; the dream is real and our sleep is real. The world strongly impinges on our consciousness and occupies our whole being.
Know your divine nature and break the dream of this world, say the Upanishads with the solicitude and love exceeding that of thousands of parents. The celebrated half-verse attributed to Sri Shankaracharya sums up Advaita Vedanta: ‘Brahman is real and the world unreal. The jiva is nothing but Brahman.’ Breaking the dream of the world is what spiritual disciplines are about.
As long as our body and mind are real to us, the world is real to us and so is the practice of spiritual disciplines like selfless work, devotion to a Personal God, meditation and discrimination.
Though essentially divine, we – this Divinity or Consciousness – identify ourselves with the mind and body and think that we are individual entities. Vedanta has a name for these individual entities: jivas, or souls. In other words, jivas are different units of divinity, the difference arising from the degree of identification with the body and mind. As jivas, we find the universe very real. Equally real is a Personal God, who projects, sustains and draws back unto Himself the jivas and the universe.