I collect examples of how Nations Go Insane Sometimes, though some are for smaller social groupings.
* Nazi Germany was my starting example.
* The Satanic Panic 
of the 1980s. (Also covered by the "You're Wrong About" podcast.)
* US McCarthyism of the 1950s
* The European Flagellants of the 1300s
* China's Cultural Revolution (1966-76).
* I'm semi-convinced that "the 60s" was a kind of insanity throughout Western Civilization (though perhaps the same phenomenon as China's contemporaneous seizure?). I cite May 68 and John Updyke's slice-of-life novel *Rabbit Redux * which I believe was set in 1968. (The title novella of Stephen King's *Hearts in Atlantis * fairly explicitly treats "the spirit of the '60s" as self-aware insanity.)
* Consider the Burned-Over District of New York state in the US's Second Great Awakening :
> I found that region of country what, in the western phrase, would be called, a "burnt district." There had been, a few years previously, a wild excitement passing through that region, which they called a revival of religion, but which turned out to be spurious. ... It was reported as having been a very extravagant excitement; and resulted in a reaction so extensive and profound, as to leave the impression on many minds that religion was a mere delusion.