An LSS Newsletter Subscriber wrote that, according to the American Psychiatric Association, mental illness

does not apply in situations where a substantial portion of individuals from a given group share their beliefs, no matter how irrational or fantastic or bizarre these beliefs may seem. A common belief within a group becomes a norm, and as such, the act of believing is not abnormal. 

This idea, apparently, comes from the Diagnostic and Statistical Manual of Mental Disorders. Is this an accurate characterization of the view of the AMERICAN PSYCHIATRIC ASSOCIATION? Can an entire group be mentally ill? Can an entire group be psychotic? If most of the human beings within a group share a delusion, are these people normal?