In simplest terms, Wish Fulfillment is basically just using the control that being a writer affords to create a story that addresses one or more outcomes that the author wishes would come about.
There is nothing at all wrong with this, in and of itself. If
Real Life fulfilled every psychological need we human beings have, we probably would not want to write fiction at all. Nor is there anything
inherently unhealthy about using fantasy to compensate for a deficiency in
Real Life; as long as one avoids becoming a
Daydream Believer,
Escapism and fantasy and
Wish Fulfillment are healthy ways a human psyche can deal with dissatisfaction.
Human beings have needs, and some of these needs are psychological in nature. This is an undeniable fact. When a person's
Real Life does not provide all of these psychological needs, they can turn to fiction in order to provide for these needs. For instance, someone lives a very boring life going to an utterly mundane job and has no excitement at all. Said person's need for variation and stimulation is not being catered for. Thus, this person might feel very attracted towards stories where an
otherwise-normal person they can easily relate to suddenly becomes an extraordinarily powerful being and is thrust into a wild and thrilling series of events.
This, in turn, is why people sometimes defend fictional characters
as if they were real, because they are not defending the character but idealized versions of themselves and/or embodiments of their values. An attack on the character is seen as an attack on traits they (the real person)
personally possesses and/or admire.
While it's a neutral term and an undeniable part of fiction in general, Wish Fulfillment is rarely mentioned in a positive light and with good reason. Usually, bringing up the term suggests that the author sacrificed quality in plotting, pacing, characterization, etc. in order to facilitate their own wishes. Depending on the author
Mary Sues and
Unfortunate Implications have a way of cropping up. However, it is entirely possible to have Wish Fulfillment stories that are still fluid and well-written.
Contrast with
Sour Grapes Tropes and
True Art Is Angsty.
Tropes generally accepted to be interrelated (if not a direct cause-effect relation) to Wish Fulfillment: