I think of ChatGPT as a natural language query engine for unstructured data. It knows about the relationships that are described in it's natural language input training data set, and it allows the same relationships to be queried from a wide range of different angles using queries that are also formulated in natural language.

When it hallucinates, I find that it's usually because I'm asking it about a fringe topic where it's training data set is more sparse, or where the logical connections are deeper than it's currently able to "see", a sort of a horizon effect.