Dreams often seem to be irrational. They do not follow the laws of physic and logic that exist in the waking world. Gravity may be suspended. People and objects can change size, disappear, or completely change their identities. The realization that something in a dream would not be possible in waking life can be a trigger for a lucid dream.
Our dreams may seem to be irrational and absurd. However, if we examine our dreams more closely, we can glean meaning and purpose from them. The dreaming mind uses symbols, metaphors and allegories. When we dream, our unconscious minds are working hard to create images and situations that will make us better able to handle things when we our awake. No matter how bizarre our dreams may be, they are rarely a sign of insanity.
It is very difficult for a sane person to understand the mind of someone who is truly mad. If you dream that you are insane, you are probably behaving like your idea of how an insane person is supposed to behave.
If you dream that you are confused or incoherent, you may be experiencing a great deal of confusion and distress in your waking life. Your dream may be a warning that you need to do something about this.
If you dream that you are in an asylum or mental institution you may need help with something. Dreaming that you are surrounded by crazy people could mean that you need to compare your emotions and your behavior with the feelings and actions of others.
Have you dreamt that someone you know is behaving oddly? Look at how their behavior in the dream differs from their behavior in waking life. That could be a sign that there is an aspect of your own character that you need to express more. For example, if you dream that a person who is normally very calm becomes unusually aggressive, you may be telling yourself that you need to be less passive.
It can be quite common to become obsessed with something in a dream. This could be a sign that you need to pay more attention to something in your waking life, or that you are focusing on something too much. An irrational fear of something in a dream may be an exaggerated form of a real fear that you have in waking life. While it is unlikely that such a fear in a dream is indicative of paranoia in waking life, it may indicate that you are too concerned with the way other people see you.
Dreaming that you are violently angry, or even that you are possessed by demons, can be a sign that you need to learn how to deal with your anger in waking life, and learn how to express it safely.
If you dream that you have multiple personalities, you may be attempting to reconcile conflicting aspects of your personality.