What it is
In medicine, a hallucination is a sensory experience without the outside stimulus that would normally cause it: hearing a voice when nobody is speaking.
In generative AI, “hallucination” is a loose term for output that’s false, made up or unsupported by its source: a confident citation to a paper that doesn’t exist. Usage varies, and some researchers prefer “confabulation.”
The two have almost nothing in common except the word, and mixing them up makes both conversations worse.
How it shows up for me
When a tool invents a source for me, I don’t think of it as the tool “seeing things.” I think of it as a very fluent guess. That keeps me checking, which is the whole point.