A delusion is a belief that has no evidence in fact — a complete illusion. The cook at the hot dog stand who thinks he is the best chef in the world? That opinion is definitely a delusion.
The noun delusion is often used in the phrase delusions of grandeur, which expresses the belief that unattainable goals are well within reach, like a terrible actress's delusions of grandeur that she won't just land her first role in a movie, it also will make her an Academy Award winner. Delusions like that can be amusing for onlookers, but other kinds of delusions are not, like those suffered by the mentally ill. Their delusions can remove them from reality, making it hard to function.