Hallucination means you have a sensation (hearing, seeing, smelling) something even though it is not real. For example if you hear voices in your head. Delusion means you believe something that is not true, but not because you are sensing it with your five senses. For example if you are paranoid you may have a delusion that people are trying to hurt you.

A hallucination is when you think you SEE or HEAR something that is not really there. Example: He hallucinated that a pink elephant was flying around his room. A delusion is when you THINK something is true that is not true, usually something that only a crazy person would believe. Example: He suffered from the delusion that aliens from Mars had kidnapped him. "Delusion" can also refer to ideas that are not crazy, but just really wrong. Example: He suffered from the delusion that every woman thought he was handsome.