A simulated reality is an approximation of reality created in a simulation, usually in a set of circumstances in which something is engineered to appear real when it is not.
Most concepts invoking a simulated reality relate to some form of computer simulation, whether through the creation of a virtual reality that creates appearance of being in a real world, or a theoretical process like mind uploading, in which a mind could be uploaded into a computer simulation. A digital twin is a simulation of a real thing, created for purposes such as testing engineering outcomes.