When, therefore, the Horizontal Moon is said to appear greater than the Meridional Moon; this must be understood, not of a greater Visible Extension, but of a greater Tangible Extension; which, by reason of the more than ordinary Faintness of the Visible Appearance, is suggested to the Mind along with it.
Berkeley on the Moon Illusion in his 1709 An Essay towards a new Theory of Vision. These lines are from section LXXIV. The Moon Illusion is discussed from section LXVII – note in LXXV his mention of the “gross blunders” of Descartes, Hobbes and Gassendi, shown up by Mr Molyneaux (not William but his brother Thomas.) Thomas Molyneaux’s paper in Philosophical Transactions is here.