If we were to take a basic three chord progression featuring C, F, and G, we would eventually be able to play these chords long enough to "hear" them move through our imagination, even after we had stopped playing them. We could close our eyes and literally feel the impact that each chord has on the way the progression is propelled forward harmonically.
If we were to look at the role or function, that each chord plays in this, we would agree that the C chord defines the sound of the song as being in a single key; the key of C. Along the way the C chord also relieves feelings of tension that are created by the other chords in the progression.
In a standard progression, the F is a chord that we often move back and forth to, from the comfort of our C chord. It will create some interest, which will help keep our listener engaged, but it does not create the real significant tension that indicates to our listener that we are building up to the end of a section.
The G creates a lot of tension in the key of C and therefore is used to: end sections, move into new sections, or move towards the last and resolving harmony, which would usually be a C chord.
If you can get to the point where you can "picture" these chord movements and their functions, in your imagination, you can start to shift them around like "sonic furniture" in a room. This will allow you to write songs without the use of an instrument, and perhaps the restrictions or distractions that having to play and compose simultaneously can present.
This skill can be expanded to include minor, diminished and augmented chords, extended harmony, and even chords imported from beyond the key.
You may even be able to "hear" modulations, into and out of key, that you will be able to identify, properly name, and then "project" into a progression without ever leaving the comfort of your own psychic domain.
This can also allow you the freedom to create music beyond your own ability to play. By documenting the chords from their imagined impression, you can leave the challenge of performing the piece up to the musicians who will be playing the piece in the studio and on stage. It may also create a challenge that will inspire you to work on your musicianship to endeavour to attain this ability. Imagine saying, "I've been practicing really hard and I can almost play the song I wrote last week".
Arranging the psychic sonic furniture is a fundamental way of connecting the music that you dream up in your wildest imagination, with your knowledge of chords (and the theory behind the movement of harmony), and making the most of the role they both play in the music you call your own.