What if everything you see, hear and touch were to pop into existence out of nowhere, and then suddenly pop back out again? Would that be consistent, at least in part, to how an illusion behaves?
Now expand the time in which 'real things' exist. They still never existed to begin with, and will eventually disappear completely. That behavior applies to the entire physical world. Nothing is permanent. So we have the first qualification for the physical world being an illusion.
The second is that an illusion is dependent upon whatever is projecting it, and that the observer sees it as real.
All 'things' in the universe are interconnected to everything else. They are completely dependent upon other 'things' for their 'existence'. This is called the Law of Interdependent Origination. Nothing arises in and of itself. Nothing has an abiding substance of its own, and so we say that all things are 'empty'. What we are actually dealing with are forms, rather than things. There are no such 'things'. And so we say:
Form is emptiness;
emptiness is form.
Ultimately, all forms are dependent upon the formless. You cannot distinguish what is form unless understood against the background of what is the formless.
The thing you call 'cloud', for example, is not independently a 'cloud'. It is the result of sunlight, water, oxygen, evaporation, condensation, etc. It is just a temporal manifestation of the combination of all these other things.
The Human Route
Coming empty-handed,
going empty-handed -- that is human.
When you are born, where do you come from?
When you die, where do you go?
Life is like a floating cloud which appears.
Death is like a floating cloud which disappears.
The floating cloud itself originally does not exist.
Life and death, coming and going, are also like that.
But there is one thing which always remains clear.
It is pure and clear, not depending on life and death.
Then what is the one pure and clear thing?
Zen Master Seung
So now I have presented two qualifications for the physical world being illusory.
A third would be that the observer firmly believes the illusion to be something real.
Suddenly, you see a snake moving on the side of the road at dusk. You recoil in horror, only to realize in the next moment that it was only a rope moving in the wind. Consciousness both projected the illusion and revealed its true nature.
Now think of the snake as metaphor for the universe, and the rope as metaphor for Reality, except that the illusion of the universe is such that it conforms to all sensory input as real, and that, unlike the 'snake', it is not so easily revealed as illusory.
Now the 'snake' was never there to begin with. It is actually the rope.
Likewise, the universe was never there to begin with. It is actually the Absolute.
And so...
'The universe is the Absolute as seen through the glass of Time, Space, and Causation'
Vivikenanda
'Time, Space, and Causation' being the distorting filter of the conditioned mind.