“There’s no reality except the one contained within us. That’s why so many people live an unreal life. They take images outside them for reality and never allow the world within them to assert itself.” -Hermann Hesse
To be is to be perceived. Perception is not a quality of the world, but of our mind.
Hesse is referring to the creative imagination, our ability to stipulate and synthesize original thoughts, or in this case concepts, to render new and original experience.
Concepts are not found in experience; we apply them to experience.
In short: When these words are perceived, concepts of understanding (categories, classifications, definitions) are brought a priori to experience in order to render it intelligibly. These a priori concepts of understanding mediate between subjective judgments of perception (derived from a posteriori sensations and a priori pure intuitions) to yield objective judgments of experience. You do not have direct access to external reality. Think of a priori concepts of understanding as the ‘interpretative lens’ or ‘conceptual structure’ used to intelligibly render and organize and categorize experience. The a priori concepts of understanding being applied determine the objective concepts of experience, and anything objective can be freely disputed by asserting alternatives.
I believe Hesse is asserting that the mind, being independent and a priori of experience, can choose to create and stipulate its own conceptual interpretative system for rendering experience from reality. So that ‘when we change the way we look at the world, the world we look at changes.’
He is saying that people fail to question the concepts or ‘mental images’ dogmatically dictated outside them, viz. by society via convention, culture, routine, etc., and assert the freedom of their creative mind. When these patterns are broken new worlds will emerge.