Doubtful you know the definition of invisibility.
Several posters have stridently maintained that invisibility in Skyrim is the result of light being manipulated. But it is not.
I'll explain my logic.
Invisible means "unseen", "not viewable".
In the game "Elder Scrolls V: Skyrim", "invisibility" spell is a spell in the school of Illusion.
When you hit the tab key, select "skills" and highlight "illusion" you'll see this sentence, which I quote verbatim, "The school of illusion involves manipulating the minds of the enemy". With no further exposition on the nature of the skill.
Take this premise: The game states what the makers of the game intend it too, and is thus, always correct.
This game is fiction. In a fictional movie called "X-men: First Class", soviet guards, searching the back of a truck, see nothing, and let the truck pass. Then the shot shows that there is a group of characters in the back of the truck that were not seen. One of these characters is a master of telepathy called "Charles Xavier". Initially this tangent may seem unrelated. It is not. It establishes a precedent in fantasy fiction literature (it's been done before, elsewhere). Ask any attorney the importance of precedence to a ruling. The precedent may not hold sway, but it is carefully considered. And it must be considered here as well. Invisibility through mind control has been established in fiction.
Now, take these 5 pieces of knowledge, and apply them to the question "How does invisibility work in Skyrim?"
3 possible answers exist.
Invisibility is the bending of light around a target, so that the target reflects no light, and is, therefore not viewable.
A subjects coloring so closely matches the background, that no contrast exists. Though light is reflecting off the subject, it's existence cannot be defined by sight.
Subject 1 is said to possess "magic" that effects the mind. Subject 1 cannot be viewed by subject 2 because the mind of subject 2 has not been allowed to process the information that would allow knowledge of subject 1's existence.
Now, taking the 5 pieces of information initially provided into context, which of those 3 choices most likely answers the question that was asked?