The phrase "psychotic state" refers to a mental condition where a person has lost touch with reality. This can cause them to have hallucinations, delusions, and experience distorted thoughts and behaviors. Full definition
Ramsay already made it clear, in the dreadful We Need to Talk About Kevin, that she was too lazy or too indifferent to explain psychotic states of mind. (wsws.org)
On admission, the patient may be in an acutely psychotic state, having lost touch with reality. (politics.co.uk)
Psychotic states can be so severe that the person completely loses his grasp on reality and is completely unable to appreciate whether what he is doing is right or wrong, or even the nature of his own actions. (religion.blogs.cnn.com)