It was Albert Einstein who defined insanity as “doing the same thing over and over again and expecting different results.” On some levels, he was correct, but insanity is actually the substitution of fantasy for reality. The guy who believes he’s Napoleon Bonaparte reincarnated and who is obsessively planning to re-conquer Europe is certifiably insane. The woman who believes she is Gaia and therefore divinized as a goddess is a nut case. Both are completely out of touch with reality and everyone surrounding them knows it.
But wholesale denial of reality is not limited to just the occasional individual. Insanity can and does afflict whole groups of people.