In the next place, as if this were possible, viz., that the image of a man who was dead could appear to another as if he were still living, he adopts this opinion as an Epicurean, and says, “That some one having so dreamed owing to a peculiar state of mind, or having, under the influence of a perverted imagination, formed such an appearance as he himself desired, reported that such had been seen; and this,” he continues, “has been the case with numberless individuals.” But even if this statement of his seems to have a considerable degree of force, it is nevertheless only fitted to confirm a necessary doctrine, that the soul of the dead exists in a separate state (from the body); and he who adopts such an opinion does not believe without good reason in the immortality, or at least continued existence, of the soul, as even Plato says in his treatise on the Soul that shadowy phantoms of persons already dead have appeared to some around their sepulchres.
Now the phantoms which exist about the soul of the dead are produced by some substance, and this substance is in the soul, which exists apart in a body said to be of splendid appearance. But Celsus, unwilling to admit any such view, will have it that some dreamed a waking dream, and, under the influence of a perverted imagination, formed to themselves such an image as they desired. Now it is not irrational to believe that a dream may take place while one is asleep; but to suppose a waking vision in the case of those who are not altogether out of their senses, and under the influence of delirium or hypochondria, is incredible.
And Celsus, seeing this, called the woman “half-mad,”— a statement which is not made by the history recording the fact, but from which he took occasion to charge the occurrences with being untrue.
Source: Against Celsus (New Advent)