The word hidden means to be kept out of sight or concealed. Etymologically, it is the past participle of the English very "hide", which derives from the Old English hȳdan ("to hide, conceal or preserve").  Interestingly, while the verb "to hide" (and its past participle "hidden") deals with concealment, English has an entirely unrelated word that is spelled exactly the same: hide (meaning the skin of an animal).  

According to the \(OED\), the adjective hidden (as a conversion from the verb) was first used in English in the mid-1500s.  The earliest recorded evidence appears before 1547 in the writings of Henry Howard, the Earl of Surrey.  Related words: Hide (verb): Traces all the way back to the Old English period (pre-1150) as hydan.  Hiding (adjective): Earliest evidence is found in a 1483 English-Latin wordbook.  Hiddenness (noun): First recorded around 1380 by the theologian John Wyclif.  

Hiding information is the engine of narrative tension.  By concealing a character's true motives, backstory, or plot details, writers create gaps that invite the audience to engage.  This deliberate concealment—often referred to as the iceberg theory—transforms a passive audience into active participants.  

Drives Curiosity and Suspense: 
When key information is withheld, it forces the audience to ask why or what next. Instead of giving all the facts up front, a skilled storyteller teases clues that create narrative drive.   
The "How-dunit": Hiding the perpetrator or method builds mystery. 
The Backstory: Hiding a character’s emotional wound explains their current flawed behavior.  

Creates Dramatic Irony: 
Sometimes information is hidden from the characters but revealed to the audience. This gap allows the viewer to see the impending danger or misunderstanding, which builds agonizing, engaging suspense. 

Enables Powerful Character Arcs: 
A character's true identity is often hidden beneath a mask or a false sense of security. As the plot progresses and the "hidden" aspects of their personality or fears are forced to the surface, the character undergoes a meaningful transformation. 

Deepens Subtext: 
Beyond plot secrets, stories often hide their deeper themes or meanings. Allegories and metaphors allow authors to explore complex moral issues or human experiences in a way that feels natural, allowing the reader to discover the true message on their own. 

Allows for Rewatchability: 
When authors weave hidden clues and foreshadowing throughout their work, the story rewards audiences with a completely new experience upon a second viewing or reading. 

8 hours ago, drpaladin said:

Secrets embrace the shadows to remain hidden while truth shines in the light.

For a situation where truth and non-truth are both disguised or hidden, see the short story by @Myr titled "Mindmaster" in his Fantasy Flash Collection .  To quickly find that story, type Fantasy Flash Collection into the search bar of the Stories tab.  Then scroll to the chapter titled Mindmaster.