"You're being paranoid" is a common phrase in everyday language. Anyone who's intensely uneasy about something, especially when there's little reason, might be told he or she is being paranoid. Take an employee with a good record who is really worried about an upcoming review, or a person who wants to leave an hour earlier than necessary for a concert saying, "I might have to drive around for an hour to find a parking place." Friends might well say, "Quit being so paranoid" to these people.
So there's "paranoid" - and then there are paranoid delusions, a possible psychotic symptom of bipolar disorder that can profoundly affect the person and those around him or her. These are also called persecutory delusions.
We've all heard of people who believe they are being spied on by the CIA and the FBI. Such a person may do structural damage to his house by tearing it apart looking for cameras and tape recorders that of course aren't there.
It's possible for a person with paranoid delusions to cause serious harm to others. An example: Pascual Valenzuela stabbed a stranger with a steak knife because he believed the man had raped his cousin. The cousin, however, said she had never been raped and had never met the victim.
Any distrust or suspicion of others that isn't based on fact can be the beginning of a paranoid delusion, if it grows into something exaggerated or an obsession. It doesn't have to be grandiose (like thinking you're so important that the CIA is after you). Even simple things can turn into persecutory delusions.
I knew a woman who went to the expense of building a high solid wood fence between her yard and her neighbor's because she was sure he and his children were coming into her yard planning to trash her garden or steal things. This erupted over an argument about a tree near the property line, and the fence cost the woman several thousand dollars - yet she never felt any more secure until she finally moved away. And the neighbors were pleasant people with well-behaved children.
Many mental disorders and some physical illnesses can cause paranoia. It's crucial to speak to a health care professional about them to determine the cause and initiate treatment.