Psycho is a slang term for someone who is mentally unstable or afflicted with a psychosis. Your best friend risks looking like a psycho if she keeps stalking her ex-boyfriend months after their breakup.
Psycho comes from the Greek word psykho, which means mental. Although the word has long been used as a prefix in words like psychologist, the pejorative term for a psychopath has only existed since the twentieth century. The word gained further notoriety after the 1960 release of Alfred Hitchcock's thriller, "Psycho." If you're always describing your boss as a psycho, you might want to think about looking for a new job.