I'm sure at this point that JP WP is correct and 幻影都市 is indeed read Illusion City, thanks Phono for bothering to actually look at the Mega-CD case and finding the spines say "幻影都市" alone in Japanese on one side and "ILLUSION CITY" alone in English on the other. There's also the plain English hamburger logo that appears in various materials:
The December 1991 issue of MSX-FAN also refers to it as "幻影都市(イリュージョン・シティ)" on page 93, though I don't know how trustworthy that magazine is necessarily