It can only be with an imagination that has exclusively given itself up to a scientific direction that we can have to do in discussing the question, What false system, and what error in science generally, or in physical science especially, can have proceeded from a perverted use of this faculty of fancy? This, it appears to me, can be no other than the well-known materialism—the atomistic view of nature, and, what is so closely connected with it, that atomistic thinking whose deadening character is far more dangerous and fatal to philosophy than that much-decried "system of nature," which, for the most part, has outlived its day, and, in its former shape, at least, is obsolete and out of fashion. This atomistic view of nature can not, for one moment, be regarded as or explained by an error of the reason. For the reason seeks every where for an absolute unity.
Schlegel, Philosophy of Life, Morrison, tr., p. 520. The "system of nature" to which he is referring is Naturphilosophie. Schlegel has identified four faculties of human life -- reason, imagination, understanding, and will. He argues that each faculty is potentially subject to a particular kind of error that can become the foundation of an entire defective system of thought. The kind of system the error of reason reaches is the general kind of idealist philosophy of the absolute for which the Germans were famous, Fichte, Hegel, and the like, in which everything is taken to unfold by pure necessary consequence, as rational idea is mistaken for reality. Materialism is the corresponding error for imagination, based on mistaking an imaginative picture for reality. He takes the two together, the error of reason and the error of imagination, to constitute the major philosophical deviations of his day.