Flashbacks and hallucinations seem similar, but there are important differences. A flashback is a vivid, traumatic memory, in which the person can visualize, hear, feel, and/or smell the traumatic event, as if they were still enduring the same trauma. A flashback appears to a person like a movie replaying in front of them, and it appears as if the person were going through the same trauma. Flashbacks are seen in people with PTSD (post traumatic stress disorder).
On the other hand, hallucinations are sensory experiences which are imagined, and not really there. Hallucinations are brought about by impaired reality testing, where the person does not know the difference between what is imagined, and what is real. Hallucinations can come in various forms, such as hearing voices and seeing things. Hallucinations are not based on traumatic experiences, such as that found with flashbacks. Hallucinations are usually seen in people with psychosis.