Paranoia is a human mental state in which a person lives in the belief (incorrectly, or without real evidence) that other people are plotting, planning or otherwise going against him / her.
The degree to which someone can be classed as paranoid can vary greatly. Someone may believe this about small everyday things such as a comment made by someone else. Other people actually suffer from paranoia to an extent which could class them as mentally disabled. However, in cases such as this, it is likely that the person is suffering from a more mainstream psychological disability and paranoia is a mere symptom of it.
Examples of people who suffer/suffered from severe paranoia include Adolf Hitler, Stalin, and Fundamentalist Christians who believe Liberals and gays are plotting to overthrow corporate America in what they dub the "Gay Agenda".