vocabulary
In my region is it usual that we say 'white' for hair which is not black or brown anymore as the age passes. But I've recently come to know that the word 'grey' can also be used instead of 'white'. Which word do you native use? The colour that I mean to ask about can be seen in the image.
As commented by @Walter, in OP's context, fancy is a synonym of imagine, believe. But the usage is becoming increasingly "dated"...
Many of the above instances will be the idiomatic exclamation "Well, fancy that"! (equivalent to "Imagine that!", "What a surprise!", "How strange!", etc.). In OP's context, Dumbledore could quite naturally have used any of those (possibly preceded or followed by something like "I didn't expect to see you here!").
Note that Dumbledore is an elderly British schoolmaster in a relatively "formal" situation (he's greeting Professor McGonagall, one of his staff who apparently happens to have adopted the form of a cat).
Idiomatic expressions as used by Dumbledore won't necessarily be so natural for younger speakers, and per @StoneyB's comment below, even Dumbledore is speaking ironically here. Brits in particular still use fancy = like, want, be attracted to quite naturally today, but fancy = imagine, believe, think is now largely confined to ironic/sarcastic contexts.
I absolutely believe that it's not the "big words" that make a good sentence or a good writer/speaker.
If you can clearly say what you mean, you are using the language well enough.
Or is the following sentence better? (Full of big words, basically the same meaning...)
If you can explicitly and concisely state what you want to convey, your usage of the language is adequate.
So, yes, go ahead, use whatever words you have in your vocabulary.
Best Answer
In my experience as a native speaker in Britain, grey hair is the catch-all term for hair faded with age. If you were describing someone specific, and trying to be precise, you might say "white hair", or "grey, not white". In that sort of specific case, the one in your picture is white.