This thesis presents a unified and systematic Text World Theory, tested and refined under practical application. It draws on a variety of linguistic, psychological, critical theoretical and cognitive scientific models, principally the cognitive discourse grammar originally developed by Paul Werth. The thesis delineates the critical and philosophical inheritance out of which Text World Theory evolved, in order to evaluate and engage critically with the theoretical framework in the light of recent developments in literary linguistics and cognitive poetics. This inheritance includes the fields of possible worlds semantics and narratology, artificial intelligence research and cognitive psychology. Essential modifications, revisions and crucial adjustments are made to Werth's approach in order to produce a refined model of Text World Theory. The augmented framework is tested through several practical and inter-related analyses. These centre around Absurd prose fiction, selected in order to highlight the adaptability of the new Text World Theory especially in the context of literary environments that are often judged to be challenging on a cognitive dimension. Extensive analyses of Paul Auster's The Music of Chance, Flann O'Brien's The Third Policeman, Emmanuel Carrere's The Mustache, Kurt Vonnegut's Slaughterhouse-Five, and Donald Barthelme's Snow White are undertaken over the course of the thesis. Further adaptations to the model are proposed as a result of these applications. The thesis aims primarily to be a contribution to the field of cognitive discourse study. However, incidental contributions are also made to the areas of the critical study of Absurd prose fiction, pragmatics and semantics, cognitive poetics and literary critical theory in general