How can our physical world (only) manifest itself to us through observation when we know that our planet experienced a long inorganic phase that predated organic evolution by millions of years? In other words, There were not yet any sentient eyes to observe our young planets existence. It seems credible to assume our planet is not an illusion because during it's formative period there was no one there to (observe) it into reality.
This question partially stems from a popular misunderstanding of what physicists mean by "observe" in the context of quantum mechanics.
I've addressed that misunderstanding here in a previous question.
When physicists say a wavefunction collapses when it is "observed", they really mean "interacted with", not necessarily "observed" in the sense of a person looking at something. In order to measure the position, velocity, or some over observable quantity of something (a.k.a., in the parlance of physicists, "observing"), for example, an atom, we essentially need to bounce something off it. In the case of our eyes, that something is a photon, but we've built other instruments that use other particles. However, there doesn't need to be a person or an instrument or anything "observing" our electron to cause this wavefunction collapse. In universe empty of everything except our electron, a photon interacting with this electron would also cause a wavefunction collapse under the Copenhagen interpretation. While the act of looking at an atom involves bouncing a photon off it and collecting that photon with one's eyes, and that act does cause the atom's wavefunction to collapse, the eyes are irrelevant to the wavefunction collapse - it's the photon bouncing off it that is relevant.
The theory of quantum mechanics does not have any rules involving sentience or consciousness or eyes - the idea of wavefunction collapse is completely independent of and unrelated to organic life.
I don't think observation is a way of creating things, for physics.
Maybe what you are referring to is the wave function collapse principle, where the observation of a physical quantity makes the system's wave function collapse in one of its states. But not observing it doesn't mean that all the other states don't exist. They exist with their own probability of becoming the collapsed state at the time of observation.
Personally, I don't put so much philosophy in this modern physics things anymore. It's not magic it's only: there are more things that can be, each of them with its probability. I think as this: you have a particle moving at 2 km/h. You take it and put in a box where you cannot see it anymore. Open the box: the particle has (for example) 99% of chance to be in the state "still 2 km/h" and 1% "now I move at 3 km/h cause a photon excited me". It's kind of more natural than thinking that the particle is moving both at 2 km/h and 3 km/h contemporary (Schrödinger's cat-like) or thinking that the particle doesn't exist anymore until you re-open the box. It's more about probability.