Fossil groups are an unusual type of galaxy system with an overluminous central galaxy more than 2 magnitudes brighter than their brightest satellite. To explain this magnitude gap, fossils have been proposed to assemble their mass at early times and, at the present, represent the final stage of galaxy-galaxy merging. However, in this talk I will describe recent results that call into question this early-formation scenario. I will begin by briefly discussing the global X-ray scaling relations of fossils compared to normal groups and clusters across a wide range in mass. I will then present a detailed examination of the evolution of fossil groups in the Illustris cosmological simulation. In particular, I will describe the origin of the magnitude gap in relation to the merger history and stellar mass assembly of fossil central galaxies, as well as the halo mass assembly history of the groups. The combination of these studies of observed and simulated fossils sheds new light on the interpretation of the magnitude gap.