Story & World
Plane of Illusion
The Illusion side of the Reality/Illusion Aspect pair. It is also the prison where the protagonist was confined for around 200 years before the story begins.
The Plane of Illusion is the Illusion half of the Reality & Illusion Aspect pair, once governed by the 4th Sovereign, Kumyo Kyo. On the Planes list it appears under its proper name, The Lotus Realm.
It's a prison. Kumyo Kyo created it long ago, fulfilling a promise to his sister Darsea, and the beta lore says the World-Ender was sealed inside it. It's also where the protagonist was confined for around 200 years; the game opens with your release from it. How those two threads connect hasn't been revealed.