The Forest of Illusion is part of the Great Forest, located in the region of Gouran. When the Great Contract was signed many years ago, the Six Wise Men of the Forest erected barrier magic in order to isolate the area. Because of this barrier, non-human races such as kobolds, dwarves and elves were not well known to the public.
Located at the entrance to the Great Forest, the Forest of Illusion's barrier magic ensured that human wanderers would make no progress in the woods. It is a very thick forest where the sun wasn't visible, making it impossible to navigate by the sun or stars. The area flourished and animals thrived without the presence of human development.
The barrier magic could be circumvented with the aid of an elf and took roughly half a day to cross. However, Lukie Ende Towayo was the key to this magic and it was destroyed during the Gate Rune War.
Following the war, more and more humans have been entering the Great Forest, with the former Forest of Illusion now being no different to any ordinary forest.