I sat through a symposium at my university back in 2012, where one of the papers presented was on schizophrenia. The professor in question frequently consulted with psychiatrists in his research.

Essentially, they are saying that schizophrenia can be diagnosed by a simple vision test now. In other words, someone that is schizophrenic will not be fooled by certain optical illusions. Also, it is merely the case of your brain functioning differently. Someone who is schizophrenic will see everything as its individual parts (so to speak) rather than the whole that everyone else does. For example, one person with schizophrenia was quoted as saying that when he looked at this wristwatch, he could see all of the parts that made up the watch, but that it took him longer to notice that all of them together made up a watch. Another said that he felt fine standing still, but when moving he felt disconnected and that it took him longer to realize and put things together without being disconcerted- as a result- he didn't feel in control. The voices you hear may actually be your own thoughts, you just don't recognize them as such.

If someone has been diagnosed as schizophrenic, then they really are. Actual demonic possession is very rare.