The book for the German movie Sonnenallee, literally At the Shorter End of Sonnenallee, provides an in-universe example that played the trope straight. When protagonist Micha finds out how his extreme-sporting relative Lutz gets to Mongolia when visa (or rather "invitations") are hard to get, by faking the seal by penciling the relief of a five Tukrig coin, Micha succeeds by this method as well. Unfortunately, when they get a real invitation to Mongolia, the officers reject approval as the seal doesn't look as it's supposed to.
Older Than Feudalism: In one of Aesop's Fables, a talented clown does impressions for a town, including an "incredibly realistic" pig's squeal. Finally, a farmer in the back shouts that it sounds nothing like a pig. The next day the two have a face-off. The clown gives his squeals, and then the farmer puts his head in his cloak and there is a horrible sound. The crowd jeers and says it's fake... and then the farmer pulls a piglet out of his coat, as he'd been pinching its ear to make it squeal.
This is referenced in Terry Pratchett's Discworld novel Wyrd Sisters. The witches hide the crown of Lancre (a simple gold coronet) among the prop crowns used by a group of traveling players, and the youngest one, Magrat, comments that the real crown looks out of place among the elaborate and ostentatious fake crowns. As Granny Weatherwax tells her, "Things that try to look like things often look more like things than things. Well known fact."
An even more specific example of this trope: in Moving Pictures, the movie-set version of Ankh-Morpork used to film Blown Away is described as looking more like Ankh-Morpork than the city itself does. The movie-set version, of course, is nothing but painted canvas and plywood nailed to the fronts of crudely-built shacks, which have yet another faux-frontage nailed to their backs.
Inverted in Guards! Guards!!, during a discussion about Carrot's sword, an astoundingly non-magical and weathered (but still very functional) specimen. Sgt. Colon very briefly wonders if old kings' swords weren't really marked by their glinting light or impressive sounds, because the kings that were around in the old days wouldn't need something showy, but something that needed to be bloody good at cutting things. In the next City Watch book, Men at Arms, the sword proves so sharp and durable that Carrot nails a bad guy through his midsection to a stone pillar.
Referenced in Men at Arms, that a bloke who could put a sword through a stone would have more right to be king than one who could pull it out. Perhaps he'd be an ace.
The sword either plays it completely straight or completely inverts this trope: since everything in the Discworld is permeated with at least a slight background level of magic anything that is completely unmagical is slightly more real than everything else around it.
Possibly referenced in Good Omens, when War has her sword delivered. The narration points out that it's not a fancy magical sword, just one obviously designed to hurt, kill, and maim as many people in as efficient a manner as possible.
The Dragonology Books by Dr. Ernest Drake describe several species of dragons as if they where real animals, but doubt the existence of Komodo Dragons.
Another Good Omens reference: The names Nutter and Device. They sound too appropriate and funny to be real, but both names are not only authentic Lancashire family names, but the names of women burned as witches in the 17th century. For reference, "Nutter" is an Old English word for "cowherd", and "Device" is pronounced DEH-viss and is just an alternative spelling of "Davis".
This trope is pretty much the same as Umberto Eco's hyperreality theories.
Subverted in Stephen Fry's novel The Liar, in which the main character finds a body with the throat cut. His first thought is that it doesn't quite look realistic, but then he reasons that he's never seen a real dead body before, and maybe real-life gore actually looks less real than the movie stuff, just like how real-life gunshots don't sound as real as movie ones. Turns out it actually was fake.
In-story example: in Heroes Die, Actors' experiences are recorded and played back for others, as if they were on the Adventures themselves. Someone plays one the protagonist's own tapes back for him, only they have turned up a few settings because they want it to seem "realistic".
In Stephen King's Duma Key, Wireman tried to kill himself, blacked out, woke up, and assumed the blood he was lying in was from him falling asleep and injuring himself falling off the chair while he was merely thinking of suicide. He had a headache. He kept on thinking that until he got to the bathroom and saw the hole in his head. He applies a Band-Aid and takes some asprin, and proceeds to spend three days straight at work until he's kicked out.
In the novel Jurassic Park by Michael Crichton, lead scientist Henry Wu explicitly states he wants to modify the carnivorous dinosaurs to make them more docile. He also says they're too much trouble to feed and keep contained, and people are just expecting the big herbivores anyway (remember, this was before the big 90s dinosaur craze). The owner, John Hammond, declares it's the real thing or nothing. Wu calmly explains that with all the genetic tampering they've already done, the dinosaurs they've made have as much in common with real dinosaurs as they do with dragons.
Amusingly, back then, people were under the impression that dinosaurs were slow, stupid lizards who lumbered around in swamps, which was how he intended to alter them. Now, thanks to that very same book and movie, people are aware that Science Has Marched On and no longer think dinosaurs are like that. Now they don't realize Raptors should have feathers.
In Timeline by Michael Crichton, a time-traveler sent back to the Hundred Years War-era France observes knights dueling in full armor to be much faster and agile than he'd imagined. Another character is watching live footage of historical events, which he finds too mundane. Abraham Lincoln "sounds like Betty Boop" when delivering the Gettysburg Address and George Washington crossing the Delaware "looks like a drowned rat" huddled up in the back of a boat, not "heroic".
In On Stranger Tides, Shandy is taught sailing by pirates, and has to learn how to deploy sails to best effect. He's surprised to learn that the proper position leaves each sail with wrinkles in it, not stretched out smooth as looked "more correct" to his landlubber eyes.
Lampshaded by Arthur C. Clarke in A Fall of Moondust; the news company covering the events in the book knows that its audience expects to see stars in space, but because they are too faint to be visible during the lunar day it has a special "stargate" circuit to add them to the picture.
The Adventures of Blue Avenger by Norma Howe argues that this is in play with Contrived Coincidence. Unlikely coincidences happen all the time, and Million-to-One Chance events are pretty common in a world with nearly seven billion people. So why is it "contrived"?
He was once told by one of his editors to tone down the violence of the bad guy in Darkness, Take My Hand since it was too "over the top" to which Lehane burst out laughing and explained that his version was the toned down version, and that the real-life exploits of James "Whitey" Bulger and the Winter Hill Gang, which he based the bad guys on, were actually far, far worse. And he should know, seeing as he grew up in the same neighborhood.
Critics of Gone Baby Gone focused on the fact that in the story Social Services Does Not Exist and criticized him for using it as a plot device... but the thing is that Lehane used to work with real abused children, so he knows all too well that trope is Truth in Television, and several of the stories told in the book by the police assigned to such cases are based on real cases Lehane handled.
Similarly, after the movie version of Gone Baby Gone came out some Bostonians complained that some of the background characters were too stereotypical, but said characters were actual residents of the area and were largely allowed to improvise their own dialog (to the point that Lehane and Ben Affleck, the director, were unsure if they would take direction or tell them to shove it).
Played with at the end of Joan Hess's O Little Town of Maggody, when Hammett swipes a bunch of Christmas ornaments to set up a spindly, ragged runt of a holiday tree for Arly. He could have swiped the perfectly-symmetrical, flawless spruce that the ornaments had been hung on, but because Hammett grew up in a shack on Cotter's Ridge — a trackless backwoods covered in real coniferous forests — he didn't think the farm-raised tree, which had never bent in the wind or suffered a fungal infection or been nibbled by porcupines, looked like a "real" tree at all.
In the afterword to the Black Widowers short story "Where is He?", Isaac Asimov states that the story received the most reader complaints, objections, and cries of improbability, but reveals that the events really happened to him as he depicted in the tale.