Sentence:  Mohandas Lakesh Singh's thoughts were far away when Donald Bry placed the report on his desk. Lakesh responded with a jump of sudden surprise. “I'm sorry,” Bry apologized. “I didn't realize you were—” “Think nothing of it, Donald,” Lakesh assured with a dismissive wave of his hand. “I was just...<WSD>away with the fairies</WSD>.” 
Meaning of the word marked with <WSD> tags:  (lost in thought); distracted or daydreaming.