A mirage is the apparent vision of a lake in the distance on a hot day and is a consequence of the refraction of light by the atmosphere. On a hot day there may be a layer of hot air near the ground. Being hotter than the air above it, it is less dense. Light travels faster through hotter, less dense air than through cooler denser air. This means that refraction can occur when light passes through these different layers of air, since the lower part of a wavefront of light will travel faster than the upper part, causing light to bend away from the ground.
The observer above is looking into the distance at the ground. Light from the sky is refracted by passing through successively hotter layers of air near the ground and bend away from the ground, eventually undergoing an inversion and travelling upwards. On entering the observer's eyes, they appear to present an image of the ground at some distance. The observer sees what may appear to be a watery surface, but he is actually seeing an image of the sky. The effect can be enhanced by seeing 'reflection' of closer objects. An example is shown below.
Mirages like this act to torture thirsty travellers, who imagine they see some distance lake and waste their energy running towards it, only to see it disappear or recede into the distance.