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Illusionism on Mystaraby Giampaolo Agosta
I wrote this piece on the Bhut which indeed links illusions to Loki -- at least in Sind. Later, I reused this concept as part of a transposition of the Brotherhood of the Yellow Sign (from the Freeport Trilogy) in Ierendi and War Rafts of Kron, with Marak as a Baldandar cultist of the Bhut pantheon (Demogorgon, Loki and Hel).
Regarding the Fey, their illusion powers are also clear, but possibly more related with concepts like Birthright's Seeming or Shadow magic. Finally, the Illusion Secret Craft is renamed Dream Magic in G:KoM, IIRC -- which makes the Nightmare Dimension connection more explicit.
Also, I think there might be different sources of magical power that have similar effects, which could be all called Illusionism, although their nature is quite different:
- The creation of seemingly real but actually insubstantial objects and creatures from magical stuff (ether and/or shadows)
- The manipulation of light and sound to create physical perceptions of things that do not exist
- The manipulation of people's mind to create the appearance of things that are not there (more akin to Dream Magic, perhaps)
- The opening of perception to realities that are physically (and even magically) not reachable, such as the Dimension of Nightmare (another option for Dream Magic)