Hallucination
Also: confabulation
A fluent, confident statement that is not true — an invented citation, a function that does not exist, a plausible number.
What people get wrong
Not a bug to be patched out. A model samples likely continuations, and a likely continuation can be false; the engineering answer is retrieval, verification and making the output checkable, not a sterner prompt.
A definition is not an understanding. This is taught properly in How agents fail, part of Agent reliability.
Learn this properly