To dream of a caterpillar represents an aspect of your personality that is adamantly avoidant. Choices or decisions that you are impervious to influence or interference. You or someone else that doesn’t care about anything except doing what they want. Annoying other people that you will avoid them no matter what.
Negatively, a caterpillar may reflect problems that don’t go away or keep defying rational explanations. Possibly a reflection of advice or a medical diagnosis that isn’t following the prescribed explanation. You may be having anxiety about making a choice that will annoy someone else a lot.
Example: A young man dreamed of playing with a caterpillar with a friend who didn’t like him doing it. In real life he had made a final decision to change schools which his friend was not pleased about.
Example 2: A woman dreamed of seeing a caterpillar. In waking life she was experiencing hallucinations that wouldn’t go away. All her doctor’s explanations kept falling apart as the hallucinations slowly got worse.