It’s not just the media who uses this term. According to this study which I’ve had a very brief skim of, the term “hallucination” was used in literature as early as 2000, and in Table 1, you can see hundreds of studies from various databases which they then go on to analyse the use of “hallucination” in.

It’s worth saying that this study is focused on showing how vague the term is, and how many different and conflicting definitions of “hallucination” there are in the literature, so I for sure agree it’s a confusing term. Just it is used by researchers as well as laypeople.