Reading and writing must be more than passive processes of mimetic display; rather, they should offer a platform for psychological transformations across race and gender. Thus literary sovereignty vis‐à‐vis ownership of creative expression and representations of self can be reclaimed. This essay offers close analysis of contemporary Australian Indigenous literature to explore the sovereignty of feminist psychologies. Does creative writing reflect a strengthening of female Indigenous psychologies, and how might this implicate race relations and the decolonization of textual worlds? These questions are inspired by Alexis Wright's most recent novel The Swan Book where she writes about “the quest to regain sovereignty over [her] own brain.” This article will explore the term craziness in a metaphorical sense: looking at whether rejecting dominant white culture equates to psychological sovereignty, improved mental well‐being, and better race relations in imaginary realms. Indigenous characters in Wright's The Swan Book and Marie Munkara's Every Secret Thing may appear “crazy” for living in a state of indifference, but paradoxically, it is this state of “craziness” or indifference that empowers them to find psychological peace and resist assimilation. Seeking psychological sovereignty means assuming a position so averse to patriarchy and colonization that it renders transformation in imaginary worlds, and urges transformation in the psyches of white readers too.