I have had delusions. including religious ones. Whats weird is being aware that thoughts are delusional. Details are hazy, but its as if that awareness comes and goes.
Psychosis is an extension of anxiety, and under acute stress, disorders that include anxiety can escalate to psychosis. Psychosis sometimes includes delusions, which are most basically false beliefs. As opposed to hallucinations, which are perceptions (seeing/hearing things) of things that don't exist.
I believe delusional thinking is linked to imbalance of the left/right frontal cortex, as well as hyperactivation of limbic system. The right frontal cortex, which is linked to negative thought, is also responsible for critical thought (rejecting ideas), while the left, which is linked to positive thought, is more free-associating and imaginative. If the right becomes too inactive, thoughts can arise that are not being rejected as false, and this may often occur with the left brain being overactive, so euphoric/manic state may be part of it. Your imagination runs away with you, and like within a dream, you are unable to notice that this is what's happening and mistake your thoughts for sanity-checked reality.