Psychotic refers to a diagnosis of irrational or violent behavior that is usually based on hallucinations or delusions - breaks from reality. This is often the result of brain injury, high fever, substance abuse, medication overdose, ingestion of toxins, etc. Physicians often use this as an "exclusionary" diagnosis, to determine whether it is a symptom of brain damage, organic disease or as a temporary result of substance ingestion.
For instance, I once knew a case where an elderly woman had been hospitalized for sudden psychotic symptoms (extreme fear and paranoia). After this problem was discussed with her family it was learned that a curandera (Hispanic folk healer) had prescribed juniper berry tea for her arthritis. Apparently this tea had worked well for the arthritis and the woman had drank a lot of it, but it also had toxic side-effects that caused the psychotic behavior. Once she had detoxed from the tea, she was fine.
See also: Psychosis