1. In Jewish law, the definition of "work that is prohibited on the Sabbath" includes "moving objects outside the private domain".
2. The definition of "domain" has three kinds: "public domain" (such as a house), "private domain" (such as a highway), and "vineyard" (a catch-all term for "hard to define whether it's public or private").
Turns out, most of an average city in the world is "vineyard". The Eruv's function is to change the domain within it from "vineyard" to "private domain". That's it. No "fooling God", no loophole, just a simple way to create a legal status. Public domain remains public, private domain remains private, and now the grey area in between gets resolved. And there's a bonus of "there's a nice symbolism in the creation of a unified community boundary".