From Wikipedia:

Fata Morgana mirages significantly distort the object or objects on which they are based, often such that the object is completely unrecognizable. A Fata Morgana can be seen on land or at sea, in polar regions or in deserts. It can involve almost any kind of distant object, including boats, islands and the coastline.

A Fata Morgana is often rapidly changing. The mirage comprises several inverted (upside down) and erect (right side up) images that are stacked on top of one another. Fata Morgana mirages also show alternating compressed and stretched zones.[1]

The optical phenomenon occurs because rays of light are bent when they pass through air layers of different temperatures in a steep thermal inversion where an atmospheric duct has formed.[1] (A thermal inversion is an atmospheric condition where warmer air exists in a well-defined layer above a layer of significantly cooler air. This temperature inversion is the opposite of what is normally the case; air is usually warmer close to the surface, and cooler higher up.)

In calm weather, a layer of significantly warmer air can rest over colder dense air, forming an atmospheric duct which acts like a refracting lens, producing a series of both inverted and erect images. A Fata Morgana requires a duct to be present; thermal inversion alone is not enough to produce this kind of mirage. While a thermal inversion often takes place without there being an atmospheric duct, an atmospheric duct cannot exist without there first being a thermal inversion.