Admit it. When you were small you put these questions to Mommy or Daddy, or somebody. Maybe they couldn't answer. However you first learned that air was reflecting light back at you, you probably didn't believe it.
To put things a little more precisely than dear old Webby, haze is the tendency for air to become opaque or reflective under certain conditions. Gas molecules or particles in the air reflect light back into your eyes, causing a loss of contrast in the image your eye receives. In modern times, air pollution is the most common cause of haze. Not fog or smoke or smog, but a low concentration of particles in the air that makes faraway objects look dirtier than they actually are. But even in the clearest air, the more molecules of nitrogen, oxygen, and water vapor there are between you and an object, the more "faded" the object will appear to be. Since blue wavelengths are the ones most scattered by the air, far-away objects will appear to have a bluish or greyish cast to them.
Under other conditions, air becomes more refractive than usual. Combined with turbulence in air, it produces mirages, twinkling stars, or the ripples you see rising from a hot road in the summer.
Landscape painters (or at least competent ones) are well aware of the effects of haze. You've seen it if you've ever watched Bob Ross paint washed-out greyish-green trees high up on the mountain, or on the far shore of the lake, and then vibrant green or dark green trees close up.
In the world of remote sensing, haze (given the fancy name of "path radiance") is a nuisance, degrading the quality of aerial photographs or radar signals being assembled into images.