To live, operate, or function with the unyielding belief in something, especially that which is fanciful, unrealistic, or untrue. Primarily heard in US. Jeremy's always labored under the illusion of being a great writer, even though he's never written more than a few crummy poems. No one likes paying taxes, but those who would call for them to be done away with altogether are laboring under the illusion that our society can function without them!

To know and understand the reality or truth of a situation. Don't worry, I'm not getting back together with Alex. After all his lies, I'm under no illusion about how he operates.

To be living, operating, or functioning based on a belief that is fanciful, unrealistic, or untrue. Jeremy's always been under the illusion that he's a great writer, even though he's never written more than a few crummy poems. No one likes paying taxes, but those who would call for them to be done away with altogether are under the illusion that our society can function without them.