What can cause the parent to see things and people that are not there?
What you are describing could be a visual hallucination or a delusion (a mistaken belief). In either case there are many possible causes. Sometimes sensory loss, in the form of vision and hearing loss, causes people to hear and see things that are not there. There are also medications that can cause hallucinations or delusions or medications that are not being prescribed or taken properly. It could be a sign of some form of mental illness or a symptom of some form of dementia. You don't say whether your mother has other symptoms such as confusion, memory loss, or being disoriented, but this would be important for a physician to know.
The most important thing for you to do in response to this behavior is to get your loved one to a good physician who can do a thorough work up. This includes lab tests, getting a good history, reviewing all the medications, and possibly some other testing. If her physician is not doing this, you need to find a geriatrician or a geriatric clinic where they are skilled and experienced with this type of behavior. As you can see, there are many possible causes and a skilled practitioner needs to sort this out.
My wife was diagnosed with alziemers several years ago. She has had hallucinations for many years. I took her to three different neurologists and they gave her all kinds of med for it. None helped.I took care of her for severl years and finally couldnt do it anymore . I put her in a nursing home where they take wonderful care of her. She still has delusions. Its like she lives in her own little world and it keeps her occupied. A new soap opera every day. She still knows who I am but forgets I have been there as soon as i leave. She tells me all the things that are going on. I have no idea what she is talking about but just go along with it. I hope she doesnt know whats happening to her. I dont think she does.