Context, and a good understanding not only of the nuances of Latin, but also those of your target language (English), will be your guide to the best translation. For example, even in the active voice, videre is not always translated as “see.” In many cases, you would rather say: look, watch, gaze upon, behold, countenance, take a gander, etc., also: realise, come to understand, perceive, experience; also: offer a view, see to it that, etc.
“It is seen” is the only the basic literal meaning of videtur, but usually not a good translation, because English speakers rarely talk like that. In Latin, when the passive videri is used, and no agent is specified, the idea is often that no seeing actually needs to take place, just that it is possible, that something is apparent, offers a certain appearance to the senses. This is the “seem” meaning.
But this “seem” meaning can be ruled out in certain cases:
- when the subject is not qualified in any way: Lucius videtur: “Lucius is seen” (by contrast, Lucius astutus videtur suggests: “Lucius seems clever,” but could also mean: “Clever Lucius is seen.” In that case you have to rely on context.)
- when an agent is specified: Fur astutus a vigilibus visus est: “The clever thief was seen by the watchmen.”
On the other hand, you should translate as “seem” when a second party is given in the dative:
- Lucius mihi astutus videtur. “Lucius seems clever to me.”
- Fur astutus vigilibus visus est. “The thief seemed clever to the watchmen.”
You are also liable to encounter uses of videri with a nominativus cum infinitivo (n.c.i.) like this:
- Puella multis ab iuvenibus amari videtur. It seems like (or: it is evident that) the girl is loved by many youths.
Note that the Latin here is simply ambiguous because the situation is ambiguous. Everybody can see the girl is much loved, it is obvious. But is it really so? We cannot see into their heads, maybe they're only after her dowry. Many “obvious” assumptions turn out wrong. In Latin this fact is already built-in, if you will.
I will hazard a guess that the background of this question is that you are reading scholastic philosophy. In these texts, especially in St. Thomas Aquinas' Summa Theologiae, the “videtur quod” is a highly formulaic expression, which is part of the standard structure of each article and always introduces a mistaken belief, which the author then proceeds to disprove:
- Videtur quod ...
- Sed contra ...
- Respondeo ...
The videtur quod section is presented as reasonable if mistaken opinions that could be and possibly are held by sensible people. So ask yourself, how would you introduce such a section in English? With “it is seen that”? Certainly not! You could say for example:
- One might think that ...
- On first sight it looks like ...
and so on, but these are rather free translations. “It seems that” is a good compromise between idiomatic English and closeness to the original Latin.