I tend to use psychosis to mean that the person is experiencing a different version or reality from the consensus. They're delusional or hallucinating.

I think to a certain extent we're all delusional. None of us is completely in touch with real reality. Sometimes we're closer, and sometimes we're further away. But I would use psychosis to describe someone who is experiencing a version of reality that's all their own or nearly all their own. Or if they're having a hard time functioning because their view of reality is so far off the mainstream of their society or culture.