Why do LLMs hallucinate, and how do you reduce it?

LLMs are trained to produce plausible next tokens, not verified truth, so when they lack knowledge they still generate a confident-sounding answer. Reduce it with retrieval-augmented generation (ground answers in real sources), instructing the model to say 'I don't know' when unsure, lowering temperature, asking for citations you can check, and adding verification steps. You can lower the rate substantially but not to zero — human verification of important facts remains necessary.