Both are words English has borrowed from French!
A "masquerade" originally had the meaning of a "masked ball," a dance in which the dancers wear a mask that hides their face, so you do not know who they are, and dress up in a costume that makes them look like something that they are not. They show a false identity, and they hide their true identity. You can see that they are there--but you don't know who they are.
"Camouflage" was originally a military term. It means to hide something, make it difficult to see, almost invisible, by using paint or clothing to break up the natural shape of something and make it blend in with its surroundings. When something is camouflaged, you can't see that it is there. It becomes invisible.