Lunacy is acting silly or stupid. Your mom might yell, "It's lunacy to go out in the snow wearing those flip flops!"
Some people use the noun lunacy when they talk about actual mental instability, although this is considered old fashioned and outdated. It's much more common to describe the lunacy of someone who does something ridiculous or foolish. While adopting a cat from the animal shelter might be a great idea, adopting all thirty cats from the shelter would be lunacy. Lunacy comes from lunatic, originally "affected with periodic insanity, dependent on phases of the moon."