An illusion is a sensory distortion that can fool a person's senses. Illusions can involve any of the senses, but visual (optical) illusions are the best understood by science.
For instance, if a person is watching a magician perform it can truly appear that the magician is doing things that are impossible. Illusions occur when a situation distorts a person's capacity for depth and motion perception and perceptual constancy.
For example, when I was younger I was taken to an attraction at an amusement park that was called the "Dutchman's Shack." This was a room that was constructed in such a way, with sloping floors and tilted walls, That there was actually the appearance of water of running uphill. This was an example of how the senses can be tricked when it tries to apply the rules of normal reality to a distorted situation.
Another example of a distorted room is the Ames room in which distorted dimensions create an optical illusion. Additionally, various processes of brain pathology can cause a person to experience "hallucinations" that are illusions created by faulty connections within the brain. These can be the sensations of seeing things that don't exist such as hearing voices and smelling or tasting substances that are not present in the environment.