This term refers to the act of temporarily entering into a fiction while knowing that “of course it is not real.”
It usually refers to the way in which an audience accepts the theatrical conventions of a production. This does not mean that the production should do all the work for the audience by building a perfect illusion. It is better to seduce the audience into becoming co-conspirators. When what is happening on the stage is primitive and clearly not "real," the audience is forced to invest its own imagination, and thus becomes an active participant in the event.
We should say: "This is not real. This is theatre. You have to join us in an act of make-belief. We will not insult your intelligence by attempting to fool you into believing that the one actor who is playing two separate roles is two separate actors. We both know that a wooden sword is more theatrical than a steel one. So let's enjoy our open lies and experience them as truths."
Besides building the audience's investment in the production, this relaxed attitude to the relationship between reality and illusion has the advantage of opening up space for metaphors and poetry.
Who needs a faithful copy of reality? An unfaithful copy is much more useful. We need to invent new civilizations, not just stand around commenting on what we have. A theatre production is an act of creative anthropology.
"I like to see the seams in shows, to understand as a member of the audience how it’s put together and that nothing is being hidden from me. Audiences get so tense, wondering, 'Am I supposed to see this or not?' looking for mistakes, but if you open it up and have the feeling— 'I don’t care if you see the seams or that it’s hemmed by hand' —then, who cares? That’s part of it. Don’t worry about it, enjoy the show."