Firstly, "creating your reality with thoughts" specifically means that every person creates a map or model (a created representation) of what they believe the world to be. You may think you operate directly in response to the real world, but in fact you operate through your created representation of the world. To understand this concept better watch this video.
The reason we create a map or model of the world is because it is impossible for us to take in all of the sensory information around us. The way our brain deals with all this input is by filtering it. Our brain is always filtering information, if we didn't filter we would be on sensory overload and have a hard time getting through the day. The three filters listed below explain how our mind creates our model of the world and therefore our own "reality".
3 Major Filters of The Mind That Create Your Reality:
We Delete - Some parts of our experience will be deleted in our brain and not represented in our model of the world. This is both necessary and sometimes detrimental. If we tried to process every single piece of sensory input around us we would be very overwhelmed. Imagine trying to get through your day if you were aware of every single sound, smell and sight around. Deletions are necessary and go on all the time, most often without our conscious awareness.
We Distort - Distortion is a process that allows us to make changes in our experience of sensory data. For example, it is possible to imagine a purple horse even though you have never seen one in real life. Also, we can fantasize about our future by imagining that it is now. Different people and cultures distort in different ways, but we are all doing it all the time.
We Generalize - Generalization is the process through which our beliefs are formed. We generalize from our past experiences and form conclusions about what causes what and what means what. It allows us to operate more efficiently form context to context. For example, when you are standing in front of a door that you have never seen before you can assume it will open just like all other doors. We are able to generalize how the world works from our past experience and past learning.
We are constantly using these filters to find patterns that match our culture, language, values, beliefs, interests, understanding of past and present experiences, and everything we have ever learned in our lives. It may be difficult for you to fully accept that you are acting on your own made-up version of reality. But the truth is, we all have different versions of reality. Your map of the world is not the territory.
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Be Well. Be Radical.