Normal perception does not differ from hallucination except...

People incarcerated, ie put in solitary confinement and denied the normal sensory experience will in a short space of time 

hallucinate.  Historically people with advanced cataracts as their vision diminished, they too hallucinated.

This is not dementia, but compensation for people  losing their sight. Hallucinations are simply unfastened vision.

For during the dream state the brain is isolated from its normal output. So internal activations 

is the only source of critical stimulation. This might be termed, 'unanchored perception';

they are not anchored to external input. 

When we are asleep vision is not tied down or anchored. When we are awake vision is something like dreaming but with 

a little more commitment to what is in front of you. Normal perceptions does nor really differ from 

hallucination. What we call 'normal perception' does not differ from hallucination, except that hallucination is not 

anchored by external input.

Source Incognito The Secret lives of the Brain by David Eagleman