Allusion is a noun which means an expression where an object is referenced to, without mentioning it clearly.
1. The novel she was reading made multiple allusions to the Bible.
2. His speech was basically an allusion of the speech made by Martin Luther King.
Illusion is a noun which means an untrue idea or a belief.
1. A magician’s task is to create illusions.
2. Indian education system is based on the illusion that marks are more important than learning.