If your family member is experiencing psychosis, he or she may be having a difficult time distinguishing reality from internal experience. Terms often used to describe psychosis include hallucinations, delusions, and confused thinking.
We think of psychosis as being on a continuum. A large proportion of the population will have psychotic-like experiences. For example, people commonly report hearing their cell phone ring even though no call has come through. This is an example of an auditory hallucination but most of the time we are able to just dismiss these experiences. The further up the continuum one goes, the harder it is to dismiss these experiences and the more distressing and captivating these experiences become.
Ultimately psychosis is an umbrella term used to define a number of different symptoms. Under this umbrella are different diagnoses including schizophrenia, schizoaffective disorder, and delusional disorder, but please talk to your doctor or therapist to learn more about this. It can be caused by medical conditions, drugs, sleep deprivation, but is often the sign of a mental illness.