Illusion remains an illusion, even if the act of creating an illusion is real human activity. An illusion can, in fact, ultimately become part of reality when people commit enough acts that are based on that illusion. However, that illusion really still remains just an illusion.
An illusion is not made any realer by the fact that it is even widely believed to be true. An illusion is not made truer even if more people will believe in it, even if the effect it has on reality will often increase accordingly. Of course, a widely believed illusion can really affect people. This can be true even in a major way, as far and as long as it is believed to be true.

What then is an illusion? I would classify as an illusion something that is created purely in the human mind. An illusion does exist only if somebody believes in it or thinks about it. However, it does not exist if anybody does  not remember it anymore.
A real chair or a mountain will exist independent of observers. However, even the most realistic illusion of a chair or a mountain will vanish if nobody knows about the existence of this illusion. One can also develop and build on the illusions created by other people. This is often the case especially in religions. However, the original founding illusion is often hard to detect among the layers and layers of later modifications and additions to the original illusion.

Many people can share same thought and thence the same illusion. In fact, even tens of millions of people can share a common illusion. However, an illusion is always recognizable by the fact that its effect on people does evaporate the moment when it is forgotten. Most of all it cannot be reinvented without knowing the original illusion.
An illusion can be the cause of many kinds of physical and mental phenomena. It is, however, true only as long it is actively used and remembered. However, trfue real-world phenomena will be found out similarly again and again independent of the observer.

Ernst Ludwig Kirchner, Nollendorfplatz, 1912 - Wikipedia

All human ideas are of course illusions to a varying degree. A litmus test could be if the same idea could be invented independently again or if an idea does originates from a mind of a human or minds of a group of humans only. It is hardly conceivable that somebody would invent 'Lord of the Rings' independently again. So, it is an illusion, even if the book itself is real, and this book is part of our reality. The existence of this original illusion does affect our lives in many of very real ways.
Illusions are extremely important for humans. Creating illusions have been a favorite pastime of humans for tens of thousands of years. Creating entertaining, informative or scary illusions is in the very essence and heart of all human culture. Illusions that are created in books, theater or cinema can really free our imaginations to see and understand things that we would often never be able to see or understand otherwise.

An illusion can well affect the way how people do see and comprehend reality, even if it is known to be just an illusion. The act of creating illusions is not a problem for humans. It can be a great source of strength and wisdom, even if illusions are much easier to manipulate to one’s own ends than for characters and stories that are based on reality. An illusory character can be always used much more freely to drive the fixed ideas of the creator of an illusion than those based on real people or real stories.
We are so used to dwelling in illusions that we have often lost the ability to discern where reality stops and illusions start. This is made more difficult by the fact that all illusions are normally based on reality in some way. The main features of all good illusions are drawn in some way from reality. Without this connection illusions would soon lose touch with real lives, and people could loose interest in them.

However, be as it may, we love, cherish and to a varying degree also live on illusions. Often in real life a good illusion is much preferable to reality for many. There is nothing wrong with that, if it makes the extremely difficult act of living a human life any more bearable, as long it does not lead to living in complete fantasy or complete rejection of reality, of course.
Sadly, there is a major problem with illusions. This problem arises when illusions are for various reasons claimed to be true. As I said, illusions can give great comfort and protect people from the harsh reality. However, I still have a problem in preferring illusions to reality as the basis for human life.

If we do so, we can soon lose the firm ground from under our feet. Decisions can start to be based more on illusions and not on how they do really affect the real lives of humans or our environment. This is always a real danger. There is a real problem that after you realize the nature of the illusions, there is no going back. It is extremely hard to revert to accepting any illusions as a real thing anymore when it is once revealed to be an illusion.
This is the reason why the very existence of atheists, freethinkers or even agnostics is a real threat to all organized religions. Letting the cat out of the bag can break an illusion that may have needed the dedicated work of thousands of people during hundreds of years to create and perfect.

An illusion that is provided by a religion can offer great comfort, great feeling of safety and belonging and having those things is valued by many. However, their feelings of comfort, safety and belonging should not be threatened by the simple existence of people who do not believe in the same illusions. This would not of course also not be the case if these things would be something more than just common, shared illusions.
In fact, very harsh blasphemy laws and even death sentences have been quite universally been used during last few millennium. They are used to keep in check those who do not personally feel the need for such illusions and who have lost their belief in them.

An illusion can be a quite harmless source of mental strength, closeness and companionship. The dark side is that maintaining an illusion as 'true' has all too often been be a reason to cause pain and sorrow to others. Of course, these problems would be easy to avoid. Those who want to believe in their pet illusions could just ignore those who don't share their a belief in them.
However, for the reasons presented here this is sadly not easily accomplished. The stronger a belief in an illusion gets and the bigger part in life it plays, the bigger the threat coming from non-illusionists is easily seen to be.

(This piece was completely refurbished on 1st  of January, 2013)