In simple terms, an optical illusion is caused by the structure of both the eye and brain and how they work together. Because of the anatomical make up of the eye and the complexity of the way images of transmitted from the eye to the brain, optical illusions are not as rare as one might consider.
The Anatomy of the Eye
The eye has two types of receptors on it (cones and rods) that pick up different bits of information on image. Around the retina, these cones and rods rest, waiting to pick up a stimuli and transfer it to the optic nerve. The optic nerve, in turn, transmits the information to the brain for processing.
Cone cells detect color and rod cells detect low-light contrasts. They work together to provide the necessary information to form an imag. However, at the edges of the retina, there are more rods and at the center of the retina, there are more cones. Because of this, based on how someone is looking at an image, they might see things differently. This is an optical illusion. For a better image, simply turning one's head and looking straight at something will provide the cones access and give a more detailed image.
Medical Syndromes Causing Optical Illusions
There is research to suggest that some optical illusions are caused by medical syndromes such as schizophrenia. Because of the nature of the disease, an individual sees something different than what is actually being seen. This is caused by the brain interpreting the information differently than it normally would be.
Effort on the Eye
Because it is more difficult to raise the eye than move the eye horizontally, the eye perceives that vertical distances are greater than horizontal distances. This creates depth in flat surfaces which can – especially when the eyes are fatigued – lead them to perceive something incorrectly and then pass that information onto the brain. The brain takes what information it has and processes it whether it is correct or not. Fatigue in the eyes is an exceptional cause of optical illusions because it takes a little longer for the eyes to focus more effectively.