"Allusion," "Illusion," or "Reference"?

The three words are often confused. An allusion is an indirect reference to something without actually saying what it is, without naming it. An illusion is a perception of something that actually exists in a misleading way. A reference is a direct naming of something. Therefore, all of the following sentences are correct:

She alluded to her daughter's father in a way that aroused everyone's curiosity about his real identity.

She had no illusions, however, about who would raise the child.

Fifty years later, a reference to the child was discovered in the will of a lifelong millionnaire—and his daughter eventually inherited.