Anosognosia (from the Greek nosos meaning 'disease', a meaning 'without' and gnosis meaning 'knowledge') is a medical condition (Anton's Syndrome for example) that couples both physical handicap with the apparent inability to perceive that same handicap. These handicaps can include paralysis, some other physical disability or cognitive impairment.

Usually caused by damage to the right brain, anosognosia can cause its victims to go to great lengths to explain their infirmity. Those suffering from paralysis might explain their immobility as fatigue, or disinterest. Someone suffering from blindness might insist that they can see, describing (entirely fictional) visual stimuli. There is a (possibly apocryphal) account describing a young man involved in a car accident -- he was in casts up to his hips and confined to a wheelchair but maintained that the hospital he was in was a prison, and his doctors jailers. When the accident was described and the patient was shown an image of himself in a mirror, he said something along the lines of, "That isn't me."

In a 1999 article entitled, Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments in the Journal of Personality and Social Psychology, Justin Kruger and David Dunning from Cornell University propose a psychological analogue to anosognosia to explain the apparent inability of those of below-average skill or competence to judge (or even to be aware of) their own incompetence.

Source:

Unskilled and Unaware of It: How Difficulties in Recognizing One's Own Incompetence Lead to Inflated Self-Assessments
http://www.apa.org/journals/psp/psp7761121.html
Neurophysiology Outline
http://academic.uofs.edu/faculty/OAKESM2/chapter1.html