Reification, from the Latin meaning "to make a thing out of something," refers to the confusion of the abstract game mechanics with actual, concrete things. For instance, a roleplaying game might use eleven character classes to describe all the player character options, which in turn causes the confusion of thinking all people in the game world belong to one of, say, eleven distinct classes.
Common expressions of this fallacy include:
In conversions and revisions: One easy misstep in a conversion or the changing of a game to a new edition is to treat a game element as a thing that must be modeled in the new game. For instance, a previous edition might have a sneak attack defined as an attack coming from behind. In converting to a new game, you might feel like you should define it in the same way, even if the new game introduces a map grid but no facing rules. Whereas, in the old, theatre of the mind approach, the sneak attack could be described logically, in the new game, you might have two characters repeatedly stabbing each other in the back. In trying to recreate the action from its game elements, you have created something silly that is difficult to narrate or rationalize.
In-game versus out-of-game confusion: Confusing things that are part of the game for the actual imaginary world of the characters. For instance, if you encounter a group of berserkers that is logically composed of warriors, fighters, and barbarians, your character might talk aloud about determining what percentage of the enemies are barbarians. In fact, they are all similarly armed and clothed, and you would not be able to distinguish their abilities except by seeing them in action. In another example, if you have a character with a special ability that is limited to once per scene, and you expend that ability, it would be illogical for the character to say, "I've already used it," rather than saying, "I'm tired," "I'm not in position," or simply relying on another ability.
Overgeneralizing: Treating the general case as prescriptive rather than descriptive. For instance, if your familiarity with clerics is that they use only blunt weapons, you might object to meeting cleric-like NPCs who use swords, or playing in a different setting or game where clerics routinely use the same weapons as other warriors. That is to say, since clerics in the game with which you are familiar use maces, you define a cleric as someone who wields a mace. As another example, you might have objected to the use of the word "warrior" in a general sense in the previous sentence to describe someone who fights, rather than specifically to a fighter or warrior class.
Reification on Wikipedia.