As an adjective, psychotic describes something that is of or related to an abnormal mental condition often characterized by delusions or hallucinations. Psychotic episodes, for example, are periods of mental instability when people lose contact with reality.
Psychotic is based on the Greek word psykhe, which means mind. As a noun, psychotic is a person suffering from psychosis — that is delusions, hallucinations, or any mental state that includes a loss of reality. Although the noun officially refers to the medical diagnosis, it is sometimes used as a slang to refer to anyone behaving in an erratic manner: "Your friend is a total psychotic! He was jumping on the tables at lunch and shouting song lyrics."