It's called fraud because it's systemized. An individual accidentally clicking on an ad, or clicking on an ad without been actually interested in a product is far from suspicious, we've all done it and we'll do it again. But that's not what this is about.
Say you have a couple of web sites and you've strapped AdSense on them. Income is ok but nothing spectacular. One day you decide to go black-hat. So you purchase a couple hundred static IPs or even better rent them from private proxies. Then you set-up a bot that systematically clicks on your ads. If you keep it low profile without becoming greedy it could run for years without anyone taking notice.
Then some other day you become greedy. You realize that if you scale your model it could bring you shitloads of money. So you build a malware and distribute it to tens of thousands of PCs. Actually you don't even have to write the code yourself, malware has been commoditized these days. So now you have 100k PCs which means that you have tons of traffic. And since you only have a handful of websites you commoditize the "business", offering ad clickthroughs for money to various publishers. Run it for a couple of years and you've become a millionaire. At this point of course eventually Google will shut you down because they have a whole department of very smart people who're monitoring these things. But nothing stops you from building other sites or no sites at all if you drive all your traffic to third parties. And let's not forget that AdSense isn't the only form of advertising. There are ads based on mere impressions. Which means that all you have to do is drive traffic to those sites.
This isn't a far-fetched scenario, it's already happening in unprecedented scale. Estimates indicate that at least 30% of ad traffic is fraudulent. Take a look at Methbot [1] for example. A botnet that was set-up to deliver fake video traffic and netted more than $5M daily.
[1]. https://www.forbes.com/sites/thomasbrewster/2016/12/20/methb...