The term "agency" denotes a part of the psychic apparatus that functions as a substructure governed by its own laws, but that is coordinated with the other parts.

In Freud's work this term first appeared in chapter VII of The Interpretation of Dreams (1900a), as a synonym or near-synonym for the term system, which he had been using for several years: "Accordingly, we will picture the mental apparatus as a compound instrument, to the components of which we will give the name of 'agencies' or (for the sake of greater clarity) 'systems."' (pp. 536-537) The term apparatus, used in a sense that never changed in Freud's work, explicitly gives the psyche a status comparable to that of the major organic systems (respiratory, circulatory, etc.).

An agency is thus a functional sub-whole, or, in modern terms, a substructure within an encompassing structure. This idea clearly came from Freud's extensive prior work...