Imagination is an umbrella term that includes headcanon, but headcanon has a much more narrow and communicative meaning to do specifically with interpreting missing or ambiguous details in established fictional universes by fans or other people who aren't part of the creative team for that universe. Using the word that best fits the idea you're trying to communicate is good, actually. Also, while English does have real words what makes a word real is nothing more than whether when one English speaker uses is can they reasonably expect other English speakers to understand it. Given that everyone who read this thread had no problem understanding the word "headcanon" (including you, despite your protestations, as you were able to define a synonym) that means it's a Real English Word(tm)(c)(r).
No, what I'm saying is not only sensible, it's the agreed-upon view by people who actually study how language works. Did you think the idiomatic English you speak is unchanged from the very first language that ever referred to itself as English or are you falling prey to the idea that the things you're familiar and comfortable with are 'correct' and everything that came before you or will come after you is somehow 'incorrect'?
