Psychoanalytic literary criticism
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Psychoanalytic literary criticism refers to literary criticism which, in method, concept, theory, or form, is influenced by the tradition of psychoanalysis begun by Sigmund Freud. Psychoanalytic reading has been practiced since the early development of psychoanalysis itself, and has developed into a rich and heterogeneous interpretive tradition.
It is a literary approach where critics see the text as if it were a kind of dream. This means that the text represses its real (or latent) content behind obvious (manifest) content. The process of changing from latent to manifest content is known as the dream work, and involves operations of concentration and  displacement.  The critic analyzes the language and symbolism of a text to reverse the process of the dream work and arrive at the underlying latent thoughts.
Freud wrote several important essays on literature, which he used to explore the psyche of authors and characters, to explain narrative mysteries, and to develop new concepts in psychoanalysis (for instance, Delusion and Dream in Jensen's Gradiva and his influential readings of the Oedipus myth and Shakespeare's Hamlet in The Interpretation of Dreams). His followers and later readers, such as Carl Jung and Jacques Lacan, were avid readers of literature as well, and used literary examples as illustrations of important concepts in their work (for instance, Lacan argued with Jacques Derrida over the interpretation of Edgar Allan Poe's "The Purloined Letter").
Jung and another of Freud's disciples, Karen Horney, broke with Freud, and their work, especially Jung's, led to other rich branches of psychoanalytic criticism: Horney's to feminist approaches including womb envy, and Jung's to the study of archetypes and the collective unconscious. Jung's  work in particular was influential as, combined with the work of anthropologists such as Claude Levi-Strauss and Joseph Campbell, it led to the entire fields of mythocriticism and archetype analysis.
The object of psychoanalytic literary criticism, at its very simplest, can be the psychoanalysis of the author or of a particularly interesting character. In this directly therapeutic form, it is very similar to psychoanalysis itself, closely following the analytic interpretive process discussed in Freud's The Interpretation of Dreams. But many more complex variations are possible. The concepts of psychoanalysis can be deployed with reference to the narrative or poetic structure itself, without requiring access to the authorial psyche (an interpretation motivated by Lacan's remark that "the unconscious is structured like a language"). Or the founding texts of psychoanalysis may themselves be treated as literature, and re-read for the light cast by their formal qualities on their theoretical content (Freud's texts frequently resemble detective stories, or the archaeological narratives of which he was so fond).
Like all forms of literary criticism, psychoanalytic criticism can yield useful clues to the sometime baffling symbols, actions, and settings in a literary work; however, like all forms of literary criticism, it has its limits. For one thing, some critics rely on psychocriticism as a "one size fits all" approach, when in fact no one approach can adequately illuminate a complex work of art. As Guerin, et al. put it in A Handbook of Critical Approached to Literature,
The danger is that the serious student may become theory-ridden, forgetting that Freud's is not the only approach to literary criticism. To see a great work of fiction or a great poem primarily as a psychological case study is often to miss its wider significance and perhaps even the essential aesthetic experience it should provide.