In my opinion, your reality is rooted in two core factors.
First, your level of consciousness, awareness or knowledge and
secondly your experience (physical, emotional).
Addressing the first factor, without the knowledge that there is
more to your world than what you are presented you are left in a state
of bondage or blindness that you alone cannot escape. In the Matrix,
until a person was "unplugged" they had no idea that the world they
knew was simply a computer generated program. Without the hope of a
person already outside of their "world" rescuing them from this
existence, they were hopelessly trapped in this space. Without
providing another option, the computer generated program was their
world and all they knew, therefore their reality.
As for the second factor, I believe what a person experiences
physical but more so emotional dictates their reality or perception of
reality. For example, though we as the viewer may have known that
Neyo's memories, experiences, essential his entire life was an
illusion, the emotions that connected him with his "past" still shaped
his reality. Even onces Morpheus unplugs him and shows him the truth,
Neyo has a very hard time accepting it. Even with the presentation of
concrete truth and evidence, one's emotions can be so strong that
their "incorrect reality" becomes no less real than before they were
provided with the knowledge of the truth. Neyo's life, as he knew it,
was his reality and until he chose to relinquish those emotional and
physical links to his "past" he would not have been able to accept the
truth, which would have essential left his reality unchanged.