Psychosis is a condition in which people experience delusions– i.e. false beliefs– and become detached from reality. Mass psychosis describes when it happens among larger populations.
We saw this in florid, excruciating detail with Covid-19; and we are still dealing with the consequences. But I would argue that we have had several lesser instances of mass psychosis over the last 15 years– the deification of Obama; the demonization and vilification of Trump, and the reaction to him; the adoption of the transgender cause as a mass movement; the false depictions of the January 6 events and participants; and even the perception of the situation in Ukraine.
Here is a pretty instructive video to learn how this works: