Through observation and reflection the early Greeks developed an attitude of skepticism toward the reliability of knowledge-- particularly that gained through the senses. Hence Plato's allegory of the Cave, demonstrating "the degrees in which our nature may be enlightened or unenlightened":
"Imagine the condition of men living in a sort of cavernous chamber underground, with an entrance open to the light and a long passage all down the cave. Here they have been from childhood, chained by the leg and also by the neck, so that they cannot move and can see only what is in front of them...At some distance higher up is the light of a fire burning behind them; and between the prisoners and the fire is a...parapet...like the screen at a puppet show, which hides the performers while they show their puppets over the top...Now behind this parapet imagine persons carrying along various artificial objects, including figures of men and animals...which project above the parapet...Prisoners so confined would have seen nothing of themselves or of one another, except the shadows thrown by the firelight on the wall of the cave facing them...And they would have seen as little of the objects carried past...Now if they could talk to one another, would they not suppose that their words referred only to those passing shadows that they saw?...In every way, then, such prisoners would recognize as reality nothing but the shadows of those artificial objects."
In this thought experiment Plato casts doubt on the validity of the mind's sensory impressions, imprisoned as it seems to be in the body. It is not specific facts or elements of experience which are questioned, but the general validity of empirical knowledge. He raises the question of whether it is possible to know ultimate reality-- that is, the world-in-itself. But Plato goes beyond skepticism to speculate on the nature of perceptual processes. In the passage above it seems to be his intention to model cognition and render an account of how the unenlightened mind comes to believe in a false reality. But since Plato is talking about normal perception, the allegory is a psychological theory as well as skeptical philosophy-- a forerunner of Kant's idealism and the modern representation theory of cognition, and perhaps a distant reflection of Eastern skeptical idealism. Plato is saying in effect that there must be some process going on in the mind whereby it represents to itself the objects of the outer world, in themselves unknowable. He recognizes that through the sensory channels we cannot know the world "directly"-- without the creative intermediary of the mind. In contemporary terms, the brain has access only to the pattern of neural firing on the sensory surfaces-- just as the cave dwellers are privy only to the indirect play of shadows. The prisoner in the cave of the skull makes theoretical judgments about the outer world, taking the shapes it sees in this shadow show for that world itself.
Skepticism has generally made its place in Western philosophy by harping on the doubtfulness of ordinary physical knowledge, rather than following Plato's lead in modelling the process by which we know what we think we know. Thus universal skepticism is dismissed by modern philosophers as illogical or pointless:
"Just as 'there can be false coins only when there are coins made of the proper materials by the proper authorities', so... there can be times when our senses deceive us only if there are times when they do not." 
But there is a broader sense in which all coin is false, since it is token and not that which it betokens. The value of coin is symbolic and conventional, unlike the usefulness of the goods and services it can buy. It is naive to think that truthful reporting of the senses means that reality is transparently presented as through a window. Our window on the world is of a different and subtler nature. The fact that an object is registered in experience may reflect the presence of a real thing, but the way that it is experienced reflects also the nature of the window, which is a good deal more like the view onto a stage. Objects, the principal characters in our reality play, are pragmatic fictions. The concept of object breaks down at the limits of the human scale.
Behind the shadow of appearances, is there, as Plato believed, a real world knowable by some means more reliable, direct or true than peering through the window of the senses? The metaphor of counterfeit money fails because it requires a domain of real values, a windowless perspective on the world (such as Plato proposed). But if perception is a representation-- a projected shadow, as he would have it-- it is not the shadow of anything which can be accessed independently of conditional mental processes, unless we are to believe that the mind does not depend on the nervous system. Rather, we see in the shadows what we need to see in order to keep our hand in the game of existence. Skepticism, far from being fruitless, renders a valuable service in making us look before we leap into action based on the too literal truth of our perceptions or beliefs. Knowledge of the world is always relative. Absolute knowledge is not knowledge of the relative world.
Plato's metaphor attempts to grasp what it is to be in The Situation-- in the position of an embodied self-conscious mind. The Mind-Body Problem has boggled philosophers for centuries because it is impossible for the mind to be both subject and object of its own thought. We know very well how to describe the world of matter. But self-perception is contrary to the mind's ingrained mode of experiencing all as world. Whatever enters the field of experience is an object of consciousness, and never the subject. The fact that some of these contents of consciousness are subjective is really a perception that they are somehow a property either of the physical organism or of its mental functioning, rather than of the world external to the body. Here are three levels of distinction. First, there is the physical world inside and outside of the skin. On the mental level there is the part of experience that seems attributable to the organization of one's mind versus the part that seems to reflect objective reality. Thirdly, there is the absolute subject which is interior to all objects of experience, physical or mental.
Cognitive psychology has taken up Plato's theme through numerous experiments demonstrating the mind's creative contribution to experience. In one situation, reminiscent of the Cave, human subjects watched a shadow cast on a translucent screen by a three-dimensional wire form. While stationary, the wire's projection as a shadow was perceived merely as a dark line on the flat screen. However, as soon as the wire was made to rotate, its true shape as an object came to life. In another experiment, kittens reared in a grey and featureless environment seemed almost unable to distinguish objects at all when released into normal surroundings. Plato also wondered what would become of human subjects rescued from his infernal cavern:
"Suppose one of them set free...What do you think he would say if someone told him that what he had formerly seen was meaningless illusion...? Suppose further that he were shown the various objects being carried by... Would he not be perplexed and believe the objects now shown him to be not so real as what he formerly saw?"
A middle-aged man who had been blind from an early age had his eyes restored through a corneal graft. Like the fugitive from the Cave, this man had to relearn to see. He could visually identify things familiar to him by touch, but had difficulty naming objects not already known in this way. Someone took him to see a complicated piece of machinery. He was unable to say anything at all about it until he closed his eyes and began to explore the device with his hands. After a while he stood back, eyes open, and proclaimed that now he could see it, and proceeded to explain its various parts and their functions.