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What's the proper use of the phrase "loosely based"?

For example, is it correct to say, "I'm writing a story about a dream I had, which is loosely based on a TV show."?

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The proper use of the phrase "loosely based" should be in reference to a fact being somehow similar. Therefore, the use in the example given makes sense and it is grammatically correct.

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no you would make a show looks based on a dream,if you dream you go camping and write rambo its loosely based on the dream

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"Loosely based" means you have taken inspiration from something but are not following it's plot closely. A dream can't be based on anything because you aren't controlling the dream.

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Example...The way our country opperates is "loosely based" on the written laws that are meant to govern.

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