Advaita means not-two, and the negative formulation is deliberate. Shankara, working in roughly the eighth century, is not asserting that everything is one thing in the sense of a collection unified; he is denying that there are ultimately two, that there is any real distinction between the self and the absolute.
The argument proceeds from the Upanishads, which he read as a coherent teaching rather than an anthology. Four sentences carry the weight, the mahavakyas: that thou art; I am Brahman; this self is Brahman; consciousness is Brahman. Shankara insists these are statements of an existing fact, not commands to achieve a union. The self, atman, is not similar to Brahman, not a part of it and not merged into it; it is it, and always was.
What then accounts for the world of distinct things? Shankara's answer is avidya, ignorance, and maya, the power by which the one appears as many. The stock illustrations are a rope mistaken in dim light for a snake, and silver seen in mother-of-pearl. On seeing the rope, the snake does not go anywhere: it never existed, and the fear it caused was nonetheless real while the error lasted. Maya is accordingly not a claim that the world is a hallucination; it is a claim about its ontological status, real enough at its own level and not ultimately real.
Liberation, moksha, therefore consists in knowledge rather than in action, ritual or accumulation of merit. Nothing is gained, because nothing was ever lacking; what ends is a misidentification. Shankara held that ritual and devotion have their place in purifying the mind and are indispensable preparation, but that they cannot themselves produce liberation, because action produces results and liberation is not a result.