This is going to get sticky... lol I want to apologize upfront for any and all the tangents I may go on here and would also like to say that I am not a scholar
There are quite a few concepts of delusion. I suppose it can all be summed up with this definition: "A delusion is a false belief or a false concept of reality." Which, as you foresaw, brings us to the definition of reality. (LOL, I can't believe Im even going to try to attempt this) How about: the quality or state of being real. Real: "not artificial, fraudulent, illusory, or apparent"
Now this just opens up a whole can of worms...
Okay, without losing too much credibility, think of it like The Matrix (yes, the movie). Minus the man-made computer, of course. And adding the choice we had to become part of it. But its as if our real selves are not here. We are not who we are. This is all just a delusion... and in another aspect, it is an illusion.
We believe many things. We believe this is The Life. We believe we know the Truth of many things. We believe in proof. We believe in the 5 senses. We believe we actually KNOW these things. I believe these are delusions. As Humans, we lack the ability of True Knowledge... the ability to Truly Know things. Many may protest this but that is another topic.
"We are not Human Beings on a Spiritual Journey, we are Spritual Beings on a Human Journey."
(I could go on for hours... but lets start there lol)