If you look at analogue B&W film for instance (at least the ones I’m familiar with), each individual crystal is either black or white. But the resolution is so high you don’t perceive it unless you look under a microscope, and if you scan it, you need very high res (or high speed film) to see the grain structure.
Dithering is not an illusion because the shades are actually still there. With the correct algorithms, you could upscale an image, dither it, down res it, and get back the exact same tones. The data isn’t “faked”, it’s just represented in a different way.
If you’re calling it an illusion, you’d have to call pretty much every way we have of representing an image, from digital to analog, an illusion. Fair, but I’d rather reserve the term for when an image is actually misinterpreted.
All the computer did was add digitally-equivalent formats that decouple the information from its representation: the image can be little dots or hex values. Sampling theory lets us perform further tricks by defining correspondences between time, frequency and amplitude. When we resample pixel art using conventional methods of image resizing, it breaks down into a smeary mess because it's relying on certain artifacts of the representational scheme that differ from a photo picture that assumes a continuous light signal.
Something I like doing when drawing digitally is to work at a high resolution using a non-antialiased pixel brush to make black and white linework, then shrink it down for coloring. This lets me control the resulting shape after it's resampled(which, of course, low-pass filters it and makes it a little more blurry) more precisely than if I work at target resolution and use an antialiased brush; with those, lines start to smudge up with repeated strokes.
For example if you alternate blue and red every frame at 60~120 FPS, the only thing you'll see is purple.