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From Citizendium, the Citizens' Compendium

A hallucination is a sensation that occurs without the appropriate external stimuli. It can occur in any sensory modality such as auditory, visual, tactile, olfactory, or gustatory. Hallucinations may be caused by transient drug use, sleep deprivation or stress, medical illness, and are a prominent feature in some mental disorders such as schizophrenia. A person who hallucinates is not necessarily experiencing psychosis, as it depends if he or she can distinguish their altered perception from reality.

In the case of hallucinogenic drugs, many of which are serotonergic or dopaminergic, an individual usually recognizes their perception as having been altered and relishes the distorted experience.