The kanji and the word are exactly the same. That means they share meanings as well. You can add phantom to the meanings as well, because phantoms are kind of like illusions.
Since this word is made up of a single kanji, it should use the kun'yomi reading. When learning the kanji, you didn't learn that reading, so here's a mnemonic to help you with this word: You look up to see a crazy illusion. You can't believe it's real. Master Roshi, from Dragonball, is standing in front of you (you thought he was a cartoon!). Then, he splits into a million versions of himself, creating a mob of Roshis (まぼろし). This mob goes on to train many people to fight.
You'll be able to see apparitions if you take this drug.
I caught a phantom fish!
After a series of ecstasy filled visions of Salmon, Fugu finally remembered she had been dead for 12 years, and he realized he was seeing an illusion.