What term is described as a loss of touch with reality that may be accompanied by hallucinations?

The term described as a loss of touch with reality that may be accompanied by hallucinations is psychosis. Psychosis is a mental state characterized by a loss of contact with reality, often accompanied by hallucinations, delusions, and disorganized speech and behavior. It is most commonly associated with severe mental illnesses, such as schizophrenia and bipolar disorder, but can also be caused by substance abuse, brain injury, or other medical conditions.