The Collaborative International Dictionary of English v.0.48:

Hallucinate \Hal*lu"ci*nate\ (h[a^]l*l[=u]"s[i^]*n[=a]t), v. i.
   [L. hallucinatus, alucinatus, p. p. of hallucinari,
   alucinari, to wander in mind, talk idly, dream.]
   1. To wander; to go astray; to err; to blunder; -- used of
      mental processes. [R.] --Byron.
      [1913 Webster]

   2. Specifically: To perceive a non-existent object or
      phenomenon; to believe that one is experiencing something
      which in reality does not exist; to experience a
      hallucination[2].
      [PJC]

The Collaborative International Dictionary of English v.0.48:

hallucinate \hal*lu"ci*nate\ (h[a^]l*l[=u]"s[i^]*n[=a]t), v. t.
   To experience (something nonexistent) as an hallucination[2].
   [PJC]

WordNet (r) 3.0 (2006):

hallucinate
    v 1: perceive what is not there; have illusions