Paranoia is a mental health condition that affects a person's thoughts. A person with paranoia is called paranoid. A paranoid person's thinking is shaped by fear and anxiety. For example, the person may fear that other people are "out to get him" or are planning to hurt him. He might believe that video cameras are watching him, or that a certain group (like the police or CIA) is following him. Or he might believe that other people can control his thoughts or use magic to hurt him. Even if these fears seem strange or absurd to others, they feel very real to the person with paranoia. He truly believes that he is in danger.
If a person is truly paranoid, his fears must not be explained by common beliefs, like his religion. For example, some religions say that people can use magic to hurt others. So a person from one of those religions should not be diagnosed as paranoid just because he has this belief. He would also have to have other paranoid beliefs - which could not be explained by his religious beliefs - to be diagnosed with paranoia.
In everyday talk, people may use "paranoid" to mean more normal worries. For example, someone may call a friend paranoid for thinking that his teacher hates him.