No, of course games aren't reality; everybody should know that. But on some level, we wish they were - and that's how immersion works.
Back in October 2005, satirist comedian Stephen Colbert coined the word "truthiness" - meant to poke fun at the actions of the government. Yet on another level, this concept of "truthiness" - that is, the things that we want to be true rather than what we know to be true - is very similar to the narratologists' idea of "verisimilitude": "fiction's ability to maintain the façade of reality."
And, as Robert Buerkle argues in Issue 215 of The Escapist, this term underlines what separates games (and art) from pure fact, and is one of the reasons why many of us find these fictional spaces to be so compelling. It's why we'll suspend our disbelief and pretend that matching the timing of a few strikes of a blacksmiths' hammer in Fable II is the equivalent of a hard day's work:
Monopoly is hardly an edge case, as countless games perform similar tasks. Operation simulates surgery; Clue simulates a murder investigation; Mall Madness simulates ... umm, shopping. Risk simulates global warfare; Battleship, naval warfare; chess, medieval warfare. Life, Assassin, Mafia, Settlers of Catan - each of these provides an abstract, though relatively straightforward, representation of some scenario. Even games without such deliberate contexts still provide metaphorical enactments of human actions. Poker, for example, hinges on economic conflict, reliant on prudent wagering and chip acquisition. Most team sports are, in the end, highly abstracted campaigns of territorial conflict. And as WarGames taught us, even Tic-Tac-Toe can ultimately be used as a proxy for global thermonuclear war. (Thank you, Matthew Broderick).
So, we live - and play - in this world, and accept that Fable 2 isn't just telling us a fairy tale, "rather, it simulates the experience of living through one." In a word, we believe in its "truthiness." To read the entire article, check out "The Truthiness of Simulation" in Issue 215 of The Escapist.