You make terrain in an area up to 1 mile square look, sound, smell, and even feel like some other sort of terrain. Open fields or a road could be made to resemble a swamp, hill, crevasse, or some other rough or impassable terrain. A pond can be made to seem like a grassy meadow, a precipice like a gentle slope, or a rock-strewn gully like a wide and smooth road.
Similarly, you can alter the appearance of structures or add them where none are present. The spell doesn't disguise, conceal, or add creatures.