religion; a synonym for mental illness?

So let's say a man lives his life believing he is constantly being watched and the government are after him; they've tapped his phones, his under constant video surveillance and believes that a microchip has been implanted in his head to monitor his thoughts.

This man would most likely be diagnosed as a paranoid-schizophrenic and possibly institutionalised.

Now, we have people who live their lives in the belief that God is constantly watching them, monitoring their every move and every thought. These people believe any deviation from God's rules will result in eternal damnation in a fiery lake... of fire.

These people are religous. There doesn't seem to be a whole heap of difference between the two examples.

Just putting it out there.