There are some members here who don’t believe in modern psychology and the concept of mental illness so this thread could get a bit heated, but it’s a good topic, especially since we have had people in the past come on here posting about wanting to die, or to harm themselves and others ( baneful work not included). Fortunately, Lady Eva is good at catching them and pointing out appropriate resources.
I myself have read posts and the first thing to pop into my head is that the person is seriously delusional and in need of help, but as far as psychology goes, the DSM-V no longer considers magical thinking as a sign of mental illness, as long as it does not negatively affect someone’s ability to function in the world. It also must be evaluated within a cultural context. Telling someone a demon told you someone’s out to get you may make them look at you weirdly but it’s not likely to send you to a psychiatric hospital. At least not right away.
A “witch doctor” in the Congo who walks with spirits is not considered mentally ill because in his culture it is normal to walk with spirits and he is able to function just fine. A teenager in the suburbs who talks openly to imaginary friends may very well be considered mentally ill, if he is unable to interact with other people around him without scaring them or making them uncomfortable. Is he able to hold a job? Support himself? Is he violent towards self or others? These are the things that are supposed to be taken into consideration when evaluating magical thinking in the context of possible mental illness. When a disembodied voice tells you to buy every yellow pencil sharpener you see, then something is wrong (this was an actual bipolar case study in my clinical psychology class when I was working towards my BA).
However, magick itself, is a destabilizing force, and someone who is mentally and emotionally unstable (not necessarily mentally ill) can have a hard time of it because the forces themselves can knock them further off balance and into the realm of mental illness.
That is why, occultists like Franz Bardon, and Eliphas Levi, recommended anybody getting deeply into magick seek out a therapist so they can learn to handle whatever their subconscious dredges up. It is also why, in various schools of Taoism and Buddhism, true cultivation was not taught to anyone under 40 because it was understood that prolonged meditation can be hazardous if you are not grounded in the world. It was a requirement to have a job and a family (most sages eventually gave up these things but they were the foundation on which their practice was built and some returned to them once they reached enlightenment or immortality.)
A lot of religious people, especially evangelicals, practice magical thinking, but they are rarely, if ever, thought to be mentally ill, though some of what they say and do could be considered quite delusional. The same can be said of the people on this forum, but most of us have jobs, a social circle, a wife or girlfriend, or husband or partner. We are functional in the world, and so do not fit the criteria for mental illness as far as magical thinking goes. It is fine to believe that you can alter the weather, as long as you can still do the dishes and take out the trash and pay your bills.
I have a diagnosed mental illness, dysthymia, which is a constant low level depression. It’s not as severe as clinical depression, and it doesn’t cycle it’s ups and downs. It is just a constant blah feeling that never ever goes away. Suicidal thoughts come and go, mainly because there is no relief from the constant blah. All my senses are dulled, other emotions are muted, and physical pain can barely register sometimes. Fortunately, through the proper medication, and meditation, I am now more in control of my thoughts, and thus my world. I am also very grounded and rational naturally, and it has only helped my magical pursuits. Earth and Fire seem to be my primary elemental make up.
Personally, I believe the purpose of magick and spirituality is to make your life better, to steal the fire from the gods and bring it to earth. If you fall so far down the rabbit hole that you are unable to function in consensus reality, then, in my opinion, you’ve missed the entire point. The witch doctor walks with spirits to aid his community and its people, but it is a hazardous job and a magician’s job is no different. If you are employed at a chemical plant, you wear protective equipment and are usually trained in how to handle toxic chemicals. If one wishes to become a god, it is pointless to spend hours at a time zooming around the astral, thinking you’re something special with amazing powers, and destined for greatness, while your body smells bed, and your house is a mess, and you have no friends. Ancient magicians all understood the importance of balance, but sometimes i think a lot of practitioners, especially newcomers to magick, fail to grasp the concept and so exacerbate any instability they may already have. I don’t think magick can cause mental illness, but I do think it can bring it out in those predisposed to it (some illnesses, like schizophrenia, are believed to have a genetic component. If someone in your family tree had it, you are susceptible to it).