1. What is it?

Madness is the losing of one’s mind, in which ‘normal’ thinking is replaced by insanity.

2. How is it made?

3. Examples in literature

Macbeth 
by William Shakespeare

Excerpt from Act V, Scene I:

Gentlewoman: Neither to you nor any one; having no witness to
confirm my speech.
[Enter Lady MacBeth, with a taper]
Lo you, here she comes! This is her very guise;
and, upon my life, fast asleep. Observe her; stand close.
Doctor: How came she by that light?
Gentlewoman: Why, it stood by her: she has light by her
continually; ’tis her command.
Doctor: You see, her eyes are open.
Gentlewoman: Ay, but their sense is shut.
Doctor: What is it she does now? Look, how she rubs her hands.
Gentlewoman: It is an accustomed action with her, to seem thus
washing her hands: I have known her continue in
this a quarter of an hour.
Lady MacBeth: Yet here’s a spot.
Doctor: Hark! she speaks: I will set down what comes from
her, to satisfy my remembrance the more strongly.
Lady MacBeth: Out, damned spot! out, I say!–One: two: why,
then, ’tis time to do’t.–Hell is murky!–Fie, my
lord, fie! a soldier, and afeard? What need we
fear who knows it, when none can call our power to
account?–Yet who would have thought the old man
to have had so much blood in him.
Doctor: Do you mark that?
Lady MacBeth: The thane of Fife had a wife: where is she now?–
What, will these hands ne’er be clean?–No more o’
that, my lord, no more o’ that: you mar all with
this starting.
Doctor: Go to, go to; you have known what you should not.
Gentlewoman: She has spoke what she should not, I am sure of
that: heaven knows what she has known.
Lady MacBeth: Here’s the smell of the blood still: all the
perfumes of Arabia will not sweeten this little
hand. Oh, oh, oh!
Doctor: What a sigh is there! The heart is sorely charged.
Gentlewoman: I would not have such a heart in my bosom for the
dignity of the whole body.
Doctor: Well, well, well,–
Gentlewoman: Pray God it be, sir.
Doctor: This disease is beyond my practise: yet I have known
those which have walked in their sleep who have died
holily in their beds.
Lady MacBeth: Wash your hands, put on your nightgown; look not so
pale.–I tell you yet again, Banquo’s buried; he
cannot come out on’s grave.
Doctor: Even so?
Lady MacBeth: To bed, to bed! there’s knocking at the gate:
come, come, come, come, give me your hand. What’s
done cannot be undone.–To bed, to bed, to bed!
[Exit]

A Streetcar Named Desire 
by Tennessee Williams

Excerpt from Scene 11:

Eunice: What a pretty blue jacket.
Stella: It’s lilac colored.
Blanche: You’re both mistaken. It’s Delia Robbia blue. The blue of the robe in the old Madonna pictures. Are these grapes washed?
[She fingers the bunch of grapes which Eunice had brought in.] 
Eunice: Huh?
Blanche: Washed, I said. Are they washed?
Eunice: They’re from the French Market.
Blanche: That doesn’t mean they’ve been washed. [The cathedral bells chime] Those cathedral bells–they’re the only clean thing in the Quarter. Well, I’m going now. I’m ready to go.
Eunice [whispering]: She’s going to walk out before they get here.
Stella: Wait, Blanche.
Blanche: I don’t want to pass in front of those men.
Eunice: Then wait’ll the game breaks up.
Stella: Sit down and…
[Blanche turns weakly, hesitantly about. She lets them push her into a chair.]
Blanche: I can smell the sea air. The rest of my time I’m going to spend on the sea. And when I die, I’m going to die on the sea. You know what I shall die of? [She plucks a grape] I shall die of eating an unwashed grape one day out on the ocean. I will die–with my hand in the hand of some nice-looking ship’s doctor, a very young one with a small blond mustache and a big silver watch. “Poor lady,” they’ll say, “the quinine did her no good. That unwashed grape has transported her soul to heaven.” [The cathedral chimes are heard] And I’ll be buried at sea sewn up in a clean white sack and dropped overboard–at noon–in the blaze of summer–and into an ocean as blue as [Chimes again] my first lover’s eyes!
[A Doctor and a Matron have appeared around the corner of the building and climbed the steps to the porch. The gravity of their profession is exaggerated–the unmistakable aura of the state institution with its cynical detachment. The Doctor rings the doorbell. The murmur of the game is interrupted.]
Eunice [whispering to Stella]: That must be them.
[Stella presses her fists to her lips.] 
Blanche [rising slowly]: What is it?
Eunice [affectedly casual]: Excuse me while I see who’s at the door.
Stella: Yes.
[Eunice goes into the kitchen.]
Blanche [tensely]: I wonder if it’s for me.
[A whispered colloquy takes place at the door.]
Eunice [returning, brightly]: Someone is calling for Blanche.
Blanche: It is for me, then! [She looks fearfully from one to the other and then to the portieres. The “Varsouviana” faintly plays] Is it the gentleman I was expecting from Dallas?
Eunice: I think it is, Blanche.
Blanche: I’m not quite ready.