One study from as early as 1895 reported that approximately 10% of the population experiences hallucinations. A 1996-1999 survey of over 13,000 people reported a much higher figure, with almost 39% of people reporting hallucinatory experiences, 27% of which daytime hallucinations, mostly outside the context of illness or drug use. From this survey, olfactory (smell) and gustatory (taste) hallucinations seem the most common in the general population.

There are few treatments for many types of hallucinations. However, for those hallucinations caused by mental disease, a psychologist or psychiatrist should be alerted, and treatment will be based on the observations of those doctors. Antipsychotic and atypical antipsychotic medication may also be utilized to treat the illness if the symptoms are severe and cause significant distress. For other causes of hallucinations there is no factual evidence to support any one treatment is scientifically tested and proven. However, abstaining from hallucinogenic drugs, stimulant drugs, managing stress levels, living healthily, and getting plenty of sleep can help reduce the prevalence of hallucinations. In all cases of hallucinations, medical attention should be sought out and informed of one's specific symptoms.

A pseudohallucination is an involuntary sensory experience vivid enough to be regarded as a hallucination, but recognised by the patient not to be the result of external stimuli. Unlike normal hallucinations, which occurs when one sees, hears, smells, tastes or feels something that is not there, with a compelling feeling or thought that it is real, pseudohallucinations are recognised by the person as unreal.

In other words, it is a hallucination that is recognized as a hallucination, as opposed to a "normal" hallucination which would be perceived as real. An example used in psychiatry is the hearing of voices which are "inside the head" according to the patient; in contrast, a hallucination would be indistinguishable to the patient from a real external stimulus, e.g. "people were talking about me".

The term is not widely used in the psychiatric and medical fields, as it is considered ambiguous; the term "nonpsychotic hallucination" is preferred. Pseudohallucinations, then, are more likely to happen with a hallucinogenic drug. But "the current understanding of pseudohallucinations is mostly based on the work of Karl Jaspers".

A further distinction is sometimes made between pseudohallucinations and "parahallucinations", the latter being a result of damage to the peripheral nervous system.

They are considered a feature of conversion disorder, somatization disorder, and dissociative disorders. Also, pseudohallucinations can occur in people with visual/hearing loss, with the typical such type being Charles Bonnet syndrome.