Imagine performing a molecular dynamics simulation. Your simulation occurs in a 3D box, and if you visualize it, it looks three dimensional, but the way the information processing works is that you have a list of atom coordinates stored next to each other in one dimensional RAM.

It's kind of the same thing with the holographic idea. Information locality is 2D (information is "near" other information as if it were on a two dimensional plane), but our perception is that of a 3D universe.

(Standard disclaimer about loose analogies not reproducing mathematical equations...)