Short answers, pulled from the story.
A hallucination is a perception that occurs without any external stimulus and carries the compelling sense of reality. An illusion, by contrast, is a distortion or misinterpretation of a real external stimulus that is actually present.
The word hallucination was introduced into English in 1646 by the physician Sir Thomas Browne. He derived it from the Latin alucinari, meaning to wander in the mind, and used it to describe a vision that receives its objects erroneously.
The estimated lifetime prevalence of auditory hallucinations across the general population is 9.6%. Children and adolescents show similar rates, around 12.7% and 12.4% respectively, while adults and those over 60 show lower rates of 5.8% and 4.8%.
Hallucinations in otherwise healthy people can be triggered by sensory deprivation, sleep deprivation, drug use, high caffeine intake, migraines, focal epilepsy, and neurological conditions. Studies going back to 1886 have found that approximately 10% of the general population has experienced at least one hallucinatory episode.
Charles Bonnet syndrome refers to complex visual hallucinations experienced by people who have partial or severe sight impairment. The hallucinations arise because the brain, deprived of visual input, generates its own imagery; they often reduce or resolve after sensory input is restored or increased.
Auditory hallucinations as an ongoing trait are associated with reduced grey matter in the superior temporal gyrus and middle temporal gyrus, including Broca's area. During acute episodes, activity increases in those same regions along with the hippocampus, parahippocampus, and the right hemispheric counterpart of Broca's area in the inferior frontal gyrus.