Talking to paranoid people seems really trippy. They're totally detached from reality, it seems like. They believe in utterly insane things like massive conspiracies dedicated to ruining their morning coffee, or some other result completely short of the millions and millions of dollars it would have taken to do everything they describe. Pointing this out does not deter them in the slightest -- obviously their enemies are both unreasonably wealthy and impossibly petty.
Surprisingly, one psychology book I read claimed these beliefs all stem from one erroneous belief, which proceeds to compound everything else. That belief? I am never wrong. And with that in place, suddenly all the craziness makes total sense. How? Think about how often the average person is thwarted, frustrated, annoyed, or defeated. It's quite often. Now imagine having to blame all of that on things other than yourself. Let's go through a common day.
You wake up, only to notice that the alarm you set last night was not on, and now you're late to school or work. You quickly rush to avoid being even later...and are stuck in traffic. People cut you off repeatedly, and one guy flips you off. "Nice." At your laboring place, your supervisor is enraged at your lateness and incompetence, and chews you out quite a lot. It's a rough day, and coming back home you again have to suffer in traffic. At home, you have misplaced the remote, and you left a cup of coffee out on the counter this morning that has now gone stale and must be thrown away. You sit to watch your favorite TV show...but it got preempted, in favor of some inane thing that you don't really care about. In irritation, you go to bed early, grumbling to yourself.
Now, if you're a sane person, you blamed the alarm on forgetting to set it last night, the traffic to the fact that you're rushing and probably driving a little rudely (plus there being a lot of people, some of who are jerks), your boss's anger at you is genuine rage, but out of proportion to the true level of your faults, the news at home is more important to many people than what you wanted to watch which is why the tv station preempted your show, the remote and the coffee were lapses of your memory that annoy you, but can nonetheless be worked around. In short, you mostly blamed yourself for what went wrong. You assure yourself that you will try harder tomorrow, and it will be less bad for you.
Now let's try it again, only this time, you are never wrong. Your alarm didn't go off. Clearly it's the evil conspiracy trying to prevent you from succeeding! They must have secretly turned it off during the night. The fiends! The traffic? Another evil plot!!!! Especially that one guy who flipped you off. Your supervisor is mad that you came in late and are now bungling yet another project? No, he's clearly in on it! You come home and your remote has been stolen!! And they hid your coffee until it went bad! They will clearly stop at nothing to irritate the living shit out of you! You sit down to enjoy a little TV, but the conspiracy people clearly saw this coming, and had your show preempted. Clearly they will stop at nothing!!! As you go to bed in irritation, you resolve that tomorrow you will get the upper hand for a change. After all, for all their evil plotting, you were not truly beaten.
The paranoid outlook is more satisfying, even if it does lead to being afraid of your own shadow and believing that your least favorite type of music is a secret plot to annoy you. After all, you're never wrong.
I think a lot of these psychological conditions are actually spectrum. One can be a little paranoid, and very into conspiracy theories, hard headed, and fearful, or very paranoid and blame the Martian space monkeys for your missing car keys. Or any amount in between.