The light which passes through the top of your eye generates an image. The light which passes through the bottom generates another image. The light which passes through the middle, yet another image. Every part of your pupil generates its own image. If all of these images are misaligned, then you get a blur. If they stack up neatly on top of eachother, you get a nice crisp (and bright) image.
If we reduce the number of images (by blocking part of the pupil), we can get a more crisp final product at the cost of making it dimmer.
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