I have no knowledge about neuroscience but recently I was wondering what is the cognitive model of human imagination? How does the human imagine things that don't exist?

Suppose I ask anyone to imagine himself climbing a mountain. He can't imagine that until he has some experience about mountaineering whether through a movie, documentary or some reading material and Wikipedia page on [Imagination][1] says that 

> ...without knowledge, imagination can not be developed...

  [1]: http://en.wikipedia.org/wiki/Imagination

If he has this experience he would be able to imagine himself climbing a mountain. Are there any theories that explain this?