When used in reference to Changeling: the Dreaming, bedlam is best described as fae insanity.
Bedlam comes in three stages, the first of which being easily curable. The second stage is far more difficult to cure, and third-stage Bedlam is widely regarded amongst Changelings as being incurable.
Several things exacerbate the condition, such as invoking the Dragon's Ire. It is also highly contagious. Changelings in Bedlam tend to spin off nervosa.
Changelings are not the only ones subject to bedlam. Kindred drinking fae vitae must pass a Courage test (difficulty: 3+BP ingested), or be drawn into bedlam. A botch instantly induces third-stage Bedlam in the vampire.