Illusion of Control
The game cheats or hides information to make you think you're better than you actually are.
Games may make you think that you are getting better and better, when in reality you are just unlocking better tools inside the game. Perhaps the game doesn't even have a component of skill at all and it just makes you feel like you have some amount control over the outcome. If a game is doing this, it is trying to make you feel like your apparent skill is greater than your actual skill.
For example, a claw machine doesn't always grab at full force, it cheats and makes it impossible to grab an item until it decides it's time to give a prize. This makes you feel like you did a good job at aiming the claw and that you are getting better, even though it's random chance.
Another way that games manipulate information to make you feel more skilled than you actually are is by grouping players into isolated worlds. These are sometimes called "shards". In a competitive game with a single leaderboard, it would be very discouraging to have a rank of 124,204. Instead, what games do is they break people up into tiny groups or shards. Maybe only a few thousand people per shard, and you only compete with those people. Your rank may be 283 which sounds a lot better. Being the 283rd best player in the world is pretty encouraging, but the game doesn't tell you that you are only competing against a small percentage of the players. This makes you feel like you are more skilled than you actually are.
Games may also randomize the difficulty of the game to make it more interesting. This is why you may get an easy level immediately following a difficult level. If the difficulty secretly becomes easier, you may feel like your skill has increased when it really hasn't and this feeling of control may get you to play the game more often.
For example, a claw machine doesn't always grab at full force, it cheats and makes it impossible to grab an item until it decides it's time to give a prize. This makes you feel like you did a good job at aiming the claw and that you are getting better, even though it's random chance.
Another way that games manipulate information to make you feel more skilled than you actually are is by grouping players into isolated worlds. These are sometimes called "shards". In a competitive game with a single leaderboard, it would be very discouraging to have a rank of 124,204. Instead, what games do is they break people up into tiny groups or shards. Maybe only a few thousand people per shard, and you only compete with those people. Your rank may be 283 which sounds a lot better. Being the 283rd best player in the world is pretty encouraging, but the game doesn't tell you that you are only competing against a small percentage of the players. This makes you feel like you are more skilled than you actually are.
Games may also randomize the difficulty of the game to make it more interesting. This is why you may get an easy level immediately following a difficult level. If the difficulty secretly becomes easier, you may feel like your skill has increased when it really hasn't and this feeling of control may get you to play the game more often.
Examples
Gems of War - Match 3 RPG"Oddly enough, the developers admitted in reviews to making the ai cheat in favor of new players to give them an easier time of things."
Hearthstone"Growing over ranks makes this feeling"
Walking Dead: Road to Survival"Yeah. Until you lose. Then you think they cheated or you need to spend more."
I Love Hue"Can't prove it, but it seems likely."
Archero"With broken op item combinations in some runs."
Star Wars™: Galaxy of Heroes"There are shards. So even if you are #1 (which may sound awesome), there are thousands of people with that same rank."