A person who creates beliefs or interpretations in their own mind that differ from what is objectively happening in reality is often described as having a "delusional" or "fantastical" mindset. Let's look at the meanings of these terms:
Delusional: Delusions are false beliefs that persist despite evidence to the contrary. A person with delusional thinking firmly holds on to their beliefs, even if those beliefs are clearly contradicted by reality. Delusions can be a symptom of certain mental health conditions, such as schizophrenia or delusional disorder.
Fantastical: When someone's thoughts or beliefs are described as fantastical, it means that they are imaginative, whimsical, or based on fantasy rather than reality. It implies that the person's thinking may be disconnected from the real world and more inclined towards creative or unrealistic notions.
In both cases, the person is experiencing a divergence between their beliefs and objective reality. It's worth noting that occasional fantasizing or daydreaming is a normal part of human imagination and creativity. However, when these beliefs become fixed and interfere with a person's ability to function in everyday life or cause distress, it may be a sign of a deeper psychological issue that requires attention or support.