Basically, it just means that the true mechanisms of power are hidden by control of the ideological framework through which we "see" the world we live in. Like theologies, only secular.
From the top-rated review on Amazon:
http://www.amazon.com/Necessary-Illusions-Thought-Democratic-Societies/dp/0896083667"Of all the articles and books of Chomsky that I have read, Necessary Illusions: Thought Control in Democratic Societies is without doubt the most exhaustively researched (and footnoted), the most logically structured, and the most convincing. Chomsky reminds us that the majority of the populace rely on the various media institutions for their information about political affairs; both domestic and foreign. One can only hold an opinion on a topic if one knows about the topic.
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"Chomsky's argument is that propaganda is to a democracy what violence is to a dictatorship. Chomsky points out that, in fact, propaganda is, contrary to popular postulations, more important and vital to a democratic society because people still have some rights. That is, since people can talk, the powers that be must ensure that only the correct words come out of the peoples' mouths. In a dictatorship it does not really matter too much what people think; for whatever they may think, they have to do what they are told, by pain of death. In countries such as the US (and the UK) other, more subtle, methods are required. People often critisise Chomsky for the sources of his information (the copious footnotes). No such critique can be levelled at this work. Chomsky's sources are declassified internal planning documents, naval proceedings documents, and the very institutions he examines, New York Times, Washington Post etc. If there was one Chomsky book I would suggest you to read, this would be it."