people who are delusional don't realize that they are delusional. They believe everything that they are experiencing or believing is "real", when in fact, it is not.

Delusion: an idiosyncratic belief or impression that is firmly maintained despite being contradicted by what is generally accepted as reality or rational argument, typically a symptom of mental disorder.

I have had major delusions. Back in my crazy religious days, I once thought that I was communicating with god, that he was trying to help me succeed and be enlightened. I was so convinced of this, that I started to hallucinate during the peak of my manic episode. I saw a cellphone glowing a happy face at me in the dark, when I whispered to it. It was communicating a secret code to me to guide me in my actions to find enlightenment/success.

Did I believe it was real? Of course! That is how the delusion happened in the first place. I could physically see the cellphone glowing and communicating a message to me when I whispered at it.

Was this real? No, I was delusional. Delusions can be as strong as waking dreams and cause hallucinations.