It is clear that in this novel there are two sides or a conflict between two groups of people and what is important to them. The novel itself gives us a helpful division to understand the central conflict by nominating these two sides as fact and fancy. It is evidently obvious that the forces of fact are marshalled by Mr. Gradgrind and Mr. Bounderby. The forces of fancy are represented by Sissy Jupe and the Circus folk, who are, to all intents and purposes, her "family." The conflict between the two sides comes clear in Chapter Two when Sissy Jupe is asked to define a horse. Note Mr. Gradgrind's reaction of Sissy's failure to define a horse:
"Girl number twenty unable to define a horse!" said Mr. Gradgrind, for the general behoof of all the little pitchers. "Girl number twenty possessed of no facts, in reference to one of the commonest of animals!"
The irony of course is highlighted by the fact that Sissy has spent all her childhood growing up around horses, and probably helping to look after them, so although she is unable to "define" a horse, she probably knows more about horses than anyone else. This irony is heightened when, in Chapter Six, we are introduced to the Pegasus's Arms, which is of course a fanciful representation of a horse that is based on myth and legend, and nothing to do with the facts that Mr. Gradgrind holds so dear.