Daastan is the oldest genre of our literature; such long & novel tales are a part of every language's history and cultural symbol. It started in the 17th century with Mullah Wajhi's Sabras and then continued till the 20th century with the Arabic Persian and Indian rhythmic tales being translated into Urdu. The purpose of such tales was to provide entertainment, the magical storytellers would create an imaginary world with their oratory and let the listener roam in it, and the Daastan writers later did the same work. These Daastan were not only a cultural and intellectual asset but you can also witness a few Psychological elements. One can understand the psychological changes in older times with the help of ancient literature. The relation between Psychology and literature is not new, the thorough research of human Psychology by Freud, Zong & Edler brought about many truths about literature and Psychology being interrelated. Emotion and many other aspects of human Psychology can be seen as the subject of these Daastan. Daastan based on play in different human situations can be easily understood through a long & interesting tale rather than by the boring details of Psychology. The trend of Daastan writing peaked in the 19th century because of psychology. The structure of Daastan and the way it was presented suited the easy-going nature of the subjugated people and daydreaming. These Daastans were the reflections of their dreams and aspirations.