Psychosis is a generic psychiatric term for a mental state involving the loss of contact with reality, causing the detioration of normal social functioning. (Reference: Stedman's Medical Dictionary) The word was first used by Ernst Von Reuchtersleben as an alternative for the terms "insanity" and "mania," and is derived from the Greek psyche (mind) and -osis (diseased or abnormal condition).

Today, the difference in uses for the terms "psychosis" and "insanity" is vast, the latter employed primarily in a legal setting to denote that a person cannot be held responsible for his or her actions in a court of law, due to psychological distress. Psychosis, on the other hand, is not a clincial diagnosis in and of itself, but, according to the Diagnostic and Statistical Manual of Mental Disorders (DSM), a symptom common to several other mental illness categories.

The three primary causes of psychosis are "functional" (mental illnesses such as schizophrenia and bipolar disorder), "organic" (stemming from medical, non-psychological conditions, such as brain tumors or sleep deprivation), and psychoactive drugs (eg barbituates, amphetamines, and hallucinogens).

A psychotic episode may involve hallucinations, delusions, paranoia, and/or disordered thinking. Psychosis is not necessarily permanent, and occurs in both the chronically mentally ill and otherwise healthy individuals. It is treated by the prescription of anti-psychotic medications, psychotherapy, and, in extreme cases, periods of hospitalization.

Neurosis is a general term referring to mental distress that, unlike psychosis, does not prevent rational thought or daily functioning. This term, coined by William Cullen in the 18th century, has fallen out of favor along with the psychological school of thought called psychoanalysis, founded by Sigmund Freud.

The DSM no longer lists "neurosis" as a category of mental illness, but disorders associated with the term have included obsessive-compulsive, chronic anxiety, phobias, and pyromania.

While the Greek roots (neuron, meaning "nerve," and -osis, meaning "disease") implies disorder, neurosis affects most of us in some mild form or other. The problem lies in neurotic thoughts or behaviors that significantly impair, but do not altogether prevent, normal daily living.

Neurosis is commonly treated, rather controversially, by psychoanalysis or other psychotherapy, despite the debate over whether or not counselors of this sort are qualified to accurately diagnosis and treat what is defined as a disorder of the nervous system.