An illusion is a distortion of a sensory perception. Each of the human senses can be deceived by illusions, but visual illusions are the most well known. Some illusions are subjective; different people may experience an illusion differently, or not at all.
Mirages are optical distortions through the atmosphere that may be photographed. While the perceived reality (such as water in the desert) is illusory, the visual image (of a reflective surface) is real.
Stage magic is a popular form of entertainment based on illusion. Magicians use tricks to give their audiences the impression that seemingly impossible events have occurred. See magic (illusion).
In psychiatry the term illusion refers to a specific form of sensory distortion. Unlike an hallucination, which is a sensory experience in the absence of a stimulus, an illusion describes a distortion of a perception so it is understood and interpreted differently. For example, hearing voices regardless of the environment would be an hallucination, whereas hearing voices which arise only from the sound of running water (or other auditory source) would be an illusion.
A similar illusion was discovered in 1913 by Mario Ponzo, who drew two identical bars across a pair of converging lines, like the railroad tracks pictured right.
Psychology at the University of Wisconsin, the Moon Illusion is caused by oculomotor micropsia/macropsia.
The Moon Illusion: An Unsolved Mystery -- a nice overview of the Moon Illusion and its possible causes.
Different strands of research on the senses over the past decade suggest that the brave cognitive scientists, psychologists and neuroscientists who dare to tackle the problem of consciousness are chasing after the wrong thing.
To say that consciousness is an illusion is not to say that it doesn’t exist, but that it is not what it seems to be―more like a mirage or a visual illusion.
For the proposal “It’s all an illusion” even to be worth considering, the problem has to be serious.