What is "allusion" in literature?

In literary terms, an allusion is a reference to something outside of the immediate narrative which is not directly mentioned but is implied. The thing being referenced can be a person or from a source, such as a newspaper article or book.

Many times the reference is to a popular fact or idea. The reader's knowledge of the thing being referenced determines the impact the allusion has on the reader. Some classical writers used allusions to act as a sort of secret language; they used references that were difficult to trace. Writers use allusions to introduce alternate opinions to their texts.