Plastic theater is the term used to describe the use of props and other elements of staging—such as walls, sounds, and lighting—to mirror the emotional states of the characters on stage rather than to depict the reality of their environment.
In Tennessee Williams's A Streetcar Named Desire, there is a good example of plastic theater in scene 11. At this point in the play, Blanche has been reduced to a state of terror and madness. Williams uses the walls of the set, in combination with sound effects, to reflect Blanche's madness. He writes in the stage directions that "Lurid reflections appear on the walls in odd, sinuous shapes." At the same time, there are "cries and noises of the jungle." These reflections and noises are not seen or heard by any of the other characters on stage and are not representative of the objective reality of the play. They are seen and heard only by Blanche and are meant to be understood as projections of Blanche's internal reality. They are Blanche's madness made manifest on stage, and they allow the audience to better appreciate and empathize with that madness. As if to emphasize the point that the reflections and noises are but projections of Blanche's own internal reality, they "fade" and "die out" a little later in the scene as Blanche is mollified by the doctor.
Another example of plastic theater is the Varsouviana music that is played throughout the play. This music is, for the most part, not a part of the play's objective reality, but rather another projection of Blanche's inner reality. Blanche hears this music at various points throughout the play when she is feeling particularly anxious. In these moments she hears the music that was playing on the night that Blanche's husband killed himself. Blanche feels guilty about—and complicit in—her husband's suicide, and that feeling of guilt contributes to and exacerbates her anxiety. When the music is played, it signals to the audience that Blanche's feelings of guilt and anxiety are rising to the surface once more.