The Collaborative International Dictionary of English v.0.48:

Castle \Cas"tle\, n. [AS. castel, fr. L. castellum, dim. of
   castrum a fortified place, castle.]
   1. A fortified residence, especially that of a prince or
      nobleman; a fortress.
      [1913 Webster]

            The house of every one is to him castle and
            fortress, as well for his defense againts injury and
            violence, as for his repose.          --Coke.
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            Our castle's strength
            Will laugh a siege to scorn.          --Shak.
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   Note: Originally the medi[ae]val castle was a single strong
         tower or keep, with a palisaded inclosure around it and
         inferior buidings, such as stables and the like, and
         surrounded by a moat; then such a keep or donjon, with
         courtyards or baileys and accessory buildings of
         greater elaboration a great hall and a chapel, all
         surrounded by defensive walls and a moat, with a
         drawbridge, etc. Afterwards the name was retained by
         large dwellings that had formerly been fortresses, or
         by those which replaced ancient fortresses. A Donjon or
         Keep, an irregular building containing the dwelling of
         the lord and his family; B C Large round towers ferming
         part of the donjon and of the exterior; D Square tower,
         separating the two inner courts and forming part of the
         donjon; E Chapel, whose apse forms a half-round tower,
         F, on the exterior walls; G H Round towers on the
         exterior walls; K Postern gate, reached from outside by
         a removable fight of steps or inclined plane for
         hoisting in stores, and leading to a court, L (see
         small digagram) whose pavement is on a level with the
         sill of the postern, but below the level of the larger
         court, with which it communicates by a separately
         fortified gateway; M Turret, containing spiral stairway
         to all the stories of the great tower, B, and serving
         also as a station for signal fire, banner, etc.; N
         Turret with stairway for tower, C; O Echauguettes; P P
         P Battlemants consisting of merlons and crenels
         alternately, the merlons being pierced by loopholes; Q
         Q Machicolations (those at Q defend the postern K); R
         Outwork defending the approach, which is a road
         ascending the hill and passing under all four faces of
         the castle; S S Wall of the outer bailey. The road of
         approach enters the bailey at T and passes thence into
         the castle by the main entrance gateway (which is in
         the wall between, and defended by the towers, C H) and
         over two drawbridges and through fortified passages to
         the inner court.
         [1913 Webster]

   2. Any strong, imposing, and stately mansion.
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   3. A small tower, as on a ship, or an elephant's back.
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   4. A piece, made to represent a castle, used in the game of
      chess; a rook.
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   Castle in the air, a visionary project; a baseless scheme;
      an air castle; -- sometimes called a castle in Spain (F.
      Ch[^a]teau en Espagne).

   Syn: Fortress; fortification; citadel; stronghold. See
        Fortress.
        [1913 Webster]

WordNet (r) 3.0 (2006):

castle in the air
    n 1: absentminded dreaming while awake [syn: reverie,
         revery, daydream, daydreaming, oneirism, air
         castle, castle in the air, castle in Spain]

Moby Thesaurus II by Grady Ward, 1.0:

28 Moby Thesaurus words for "castle in the air":
   Xanadu, airy nothing, autism, bubble, castle in Spain, chimera,
   daydream, deception, deluded belief, delusion, dereism, dream,
   dream vision, dreamland, dreamworld, false belief, ignis fatuus,
   illusion, misbelief, misconception, pipe dream, self-deceit,
   self-deception, self-delusion, trick, trip, vapor,
   wrong impression