This quote means that art is the most creative, beautiful and convincing form of falsehood or telling lies. Art can create completely imaginary worlds and create the appearance that things are different from what they really are. Art can also distort facts and make them more palatable. Art can bring out emotions that are not real, or create illusions that are far more powerful than reality. For example, a painting or a film can shape our views and opinions on a subject, though it may be exaggerated to create a more dramatic effect.