The concept of thought disorder has been criticized as being based on circular or incoherent definitions. For example, thought disorder is inferred from disordered speech, based on the assumption that disordered speech arises because of disordered thought. Incoherence, or word salad, refers to speech that is unconnected and conveys no meaning to the listener.

Furthermore, although thought disorder is typically associated with psychosis, similar phenomena can appear in different disorders, potentially leading to misdiagnosis—for example, in the case of incomplete yet potentially fruitful thought processes.

It has been suggested that individuals with autism spectrum disorders (ASD) display language disturbances like those found in schizophrenia; a 2008 study found that children and adolescents with ASD showed significantly more illogical thinking and loose associations than control subjects. The illogical thinking was related to cognitive functioning and executive control; the loose associations were related to communication symptoms and to parent reports of stress and anxiety.

Thought disorder (TD) or formal thought disorder (FTD) refers to disorganized thinking as evidenced by disorganized speech. Specific thought disorders include derailment, poverty of speech, tangentiality, illogicality, perseveration, and thought blocking.

Psychiatrists consider formal thought disorder as being one of two types of disordered thinking, with the other type being delusions. The latter involves "content" while the former involves "form". Although the term "thought disorder" can refer to either type, in common parlance it refers most often to a disorder of thought "form" also known as formal thought disorder.

Eugen Bleuler, who named schizophrenia, held that thought disorder was its defining characteristic. However, formal thought disorder is not unique to schizophrenia or psychosis. It is often a symptom of mania, and less often it can be present in other mental disorders such as depression. Clanging or echolalia may be present in Tourette syndrome. Patients with a clouded consciousness, like that found in delirium, also have a formal thought disorder.

However, there is a clinical difference between these two groups. Those with schizophrenia or psychosis are less likely to demonstrate awareness or concern about the disordered thinking. Clayton and Winokur have suggested that this results from a fundamental inability to use the same type of Aristotelian logic as others. On the other hand, patients with a clouded consciousness, referred to as "organic" patients, usually do demonstrate awareness and concern, and complain about being "confused" or "unable to think straight"; Clayton and Winokur suggest that this is because their thought disorder results, instead, from various cognitive deficits.