1) Why does the One Consciousness appear in different forms?
2) If life is nothing but a big dream: why, then, given that my actions are not truly real, can the karma principle take place?
1) Your first question is the same as asking: “Why did the one God create this manifold universe? Why did the ONE manifest different forms which seem separate? The Indian scriptures state that God created the universe “in order that He might enjoy Himself through many.” You may answer, “But how is that enjoyment possible, given that there is so much suffering?”
According to Yogananda’s teachings, all of creation is God’s lila, His play, often described as a film, just like in a cinema: in that film, the soul experiences many sad scenes, alternating with happy scenes. Through these “scenes” each soul gradually evolves and finally becomes a saint, who enjoys a true and marvelous romance with the Lord. At that point the deep purpose of Creation is fulfilled: the “film” ends in supernal joy, in bliss, for everyone. The One Consciousness, in other words, is a great playwright, or a “film director.” He creates the dream film which we call life, and which at present can result in suffering, but finally it will evolve into a great “Happy End,” for every soul.
2) For your second question: if nothing is truly real, then how can my actions be real enough to evoke a law such as karma, having a concrete result and consequence? The thing is that the creation-dream is real on its own level. On this level – right here on Earth – the dream has indeed rules, principles, and cosmic laws. It is therefore a dream with a concrete logic, and intelligent dream. As long as we are bound to it (identified with it, not realizing the Truth behind it) we are caught in these principles, in its logic. It is the same as when you are sleeping and you have a dream. You are caught in that dream and you may hit your head against a wall, which hurts in the dream, and you suffer. But then you wake up in the morning you realize, “My head is not hurting at all.” The same is true with this present level of reality. While there are laws, such as karma, you will one day realize, when you wake up from it, that it was nothing but a big dream.
So it’s better to wake up soon. How to do that? Meditation has as a job to help us wake up — especially Kriya Yoga.
All the best on your inward journey,