Is 'Hydaelyn' a misnomer based on a misconception?

[MikkoAkure]

Parts of the city may have been illusion, but the ruins in the surrounding area are of Amaurotian origins, as are the ruins the Ondo live in.

It is likely Emet used the ruins of an actual Amaurotian city as the base of his illusion. Not sure if it was ever outright stated if it IS the ruined city of Amaurot itself though, but its probable.

It is the actual city. Thancred even mentions being unable to get into the big building Emet was hiding in because what we see is a veneer of an illusion over the ruins and the window he was trying to get into was sealed shut by years of junk. When we get to the Tempest, the Ondo even say that the ruins have always been there, but it is just now that they’ve been turned on.

[Izar_Chillen]

It is the actual city. Thancred even mentions being unable to get into the big building Emet was hiding in because what we see is a veneer of an illusion over the ruins and the window he was trying to get into was sealed shut by years of junk. When we get to the Tempest, the Ondo even say that the ruins have always been there, but it is just now that they’ve been turned on.

WARNING

Spoilers

Indeed, the city even "recognises the WoL"when you first get there. If the city was a complete illusion born of the mind of Emet Selch then there would be no reason why he would imagine his creations to recognise the player having Ascian heritage because he was unaware of it until his end.