Here is an eye opening statement of Bhagavan Ramana Maharishi that helps me understand this phenomenon a little better from my perspective.
Quoting from "The Teachings of Ramana Maharishi In His Own Words" by Author Osborne:
"The world is perceived as an apparent objective reality when the mind is externalized, thereby abandoning its identity with the Self. When the world is thus perceived the true nature of the Self is not revealed; conversely, when the Self is realized the world ceases to appear as an objective reality."
Let me first start with the meaning of externalizing and internalizing the mind. We live in 2 states of the mind all the time, that which we stitch into the external world around us, which we call "real" and that which is a figment of our imagination and perception which is apparently internal and "unreal" from our own perspective.
To put this in a practical example, the real world could be defined as what my boss expects me to do at work tomorrow and the unreal world is my apparently realistic imagination of how beautiful Lord Shiva Nataraja looks in the great hall of Chidambaram when I imagine Him through my devotional mind. As I am extremely connected to the external world, it is very difficult for the mind to state it as unreal and try and connect to the "Self", hence the external world appears as the apparent objective reality. In case, in all sincerity I made the dance of Lord Shiva Nataraja all real in my mind and enjoyed the blissful moment of viewing his divine presence in my mind, that world built on the river of Bhakti is far more real than a distant boss I may or may not meet tomorrow.
The next word I would like to explain is what the Self is. This of course is my understanding and purely my perspective, and I may be wrong :). To my understanding and realization, the Self is the definition of ME, at this present moment in time, with no thoughts that cloud my mind, with no intellect that defines my ego, with no rules that define my identity, with no relationships that govern my role, and with no possessions that define my earthly existence. I am free off the world, I am free off society, I am free off my ego, I am free off man made rules and I possess nothing. When the mind tunes itself to this thinking for even 5 minutes and connects with this reality, I have touched the Self, that is the real ME. Hence the world now ceases to appear, it is non existent, and therefore not real.
This explanation in simpler terms defines the deeper truth of what the Great Ramana Maharishi might have tried to indicate, but now, there is the other argument of how do we call an ever changing world as unreal and illusionistic specially when the changes are visible right before our eyes?
Let’s revisit this statement of the illusion in this so called real world. Let’s take the step back and view the history of this country and its people across the ages. We have had a colorful past, there have been enough battles, there is enough diversity in language and life style, and yet the religious nature of Hinduism in the country is intact, and as ancient as ancient can get surpassing all the other world religions in terms of time and tolerance to withstand any form of destruction.
As Vedanta explains, that which changes is unreal and that which remains unchanged with the tolerance of time is real. People have come and gone, generations have changed, dynasties have been wiped out and replaced and yet the basic religious identity hardly got shattered by these blows. Isnt the faith of Hinduism, this way of life, this art of spiritualism actually real that it didn’t depend on any one human being or time for its sustenance? The thought of Lord Shiva is as powerful today as it was in the Indus valley ages. The thought of Vishnu is as profound now as it was during the Aryan age [If there was a disputed Aryan period at all?!]
Change is not permanent, and that is best explained by the recent turmoil brought in by the wealth revealed after centuries in the ancient temple of Lord Padmanabha Swamy. The wealth belongs to no one; the wealth in our system of rules still has great value, without an owner. Our rules don’t define what to do with this wealth, but this wealth certainly reeks fear into people about who will manage it and how justly they will be honest to the Lord's earthly possessions and hopefully it will not go into the wrong hands. The wealth cannot be used [to be fair to all] and therefore much as it is of great value, it is as good as sand for it belongs to no one.
Conceptually, what good has "Change" brought to this newly found wealth at an ancient temple? Is Lord Padmanabhaswamy suddenly that much more important because of the wealth he now has revealed to us as we perceive it through our minds? He always had it, we found His wealth now! This wealth was illusionistic and conceptual till it was brought to the surface, and now it controls the mind a lot more than the Bhakti that rules the devotees mind to Lord Padmanabhaswamy. He is no longer the Great divine being who rests in the enigmatic ocean of time, he is now the owner of Rs 90000 crores which will again disappear with time, but Lord Padmanabha Swamy as a concept will remain even if this temple is ravaged by time.
To the great Sage Ramana Maharishi, I bow in all humility for these divine teachings.