An allusion is an expression or phrase that is meant to reference an event, person, place, thing, or idea without discussing it explicitly. Typically, the reference is historically or culturally significant in some way. It is important to remember that an allusion is an indirect reference and it is left up to the audience to successfully make the connection between what is explicitly said and what the author is alluding to.

Allusion originates from the Latin word alludere, meaning “to play with, to jest.”

Examples of allusion include the following excerpt from Shakespeare’s Hamlet, which alludes to the assassination of Julius Caesar:

A little ere the mightiest Julius fell,
The graves stood tenantless and the sheeted dead
Did squeak and gibber in the Roman streets;
As stars with trains of fire and dews of blood,
Disasters in the sun; and the moist star
Upon whose influence Neptune’s empire stands
Was sick almost to doomsday with eclipse:
And even the like precurse of fierce events,
As harbingers preceding still the fates
And prologue to the omen coming on,
Have heaven and earth together demonstrated
Unto our climatures and countrymen.
(Act 1, scene 1, lines 124–128)

The allusion here then becomes that Caesar is a king, and the collapse of the Roman Empire as prefigured by his death (maybe) and then that connection shows how the sighting of his father's ghost reads to Hamlet. Or something.

Martin Luther King uses allusion in the following line from his “I Have A Dream” speech:

Five score years ago, a great American, in whose symbolic shadow we stand today, signed the Emancipation Proclamation.

King alludes to Abraham Lincoln by using the phrase “five score years ago,” which calls to mind the iconic opening lines of Lincoln’s “Gettysburg Address” (“Four score and seven years ago”), and by mentioning the Emancipation Proclamation, which Lincoln signed. Using these allusions, King implies that Lincoln is the “great American in whose…shadow we stand.”