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Horror and psychology have a connection that has persisted since its origins. Questions about ghosts or madness stretch all the way to Shakespeare's Hamlet. Though Hamlet is not necessarily horror it is a good example of this phenomena being explored in fiction. However, there are pieces of the horror genre that come a little bit later.

These questions of ghosts or madness grew in prominence in the Victorian era due to their obsession with spiritualism which led to a spike in frequency of séances and the popularity of supernatural phenomena. Additionally, the increase in the public knowledge of and interest in psychology which was aided by the theories of Jung and Freud. Freud even wrote an essay on this topic entitled "The Uncanny".  This era also saw the increase and popularization of Gothic literature. The biggest theme in this genre of literature is the supernatural and madness.

A drawing of a Victorian séance

One of the most well remembered pieces of literature that exemplify this concept is the novella The Turn of the Screw by Henry James. It follows a governess that, while caring for two children in an isolated country estate, becomes convinced that the house is haunted by multiple spirits. People have contentious debates to this day about whether the governess was actually mad or if the ghosts were actually real. It even inspired the modern horror series The Haunting of Bly Manor. 

Another piece of literature that discusses this link is The Yellow Wallpaper by Charlotte Perkins Stetson. In the short story a woman is confined to a room by her physician husband in a room to treat depression and hysteria, though he doesn't believe she is mad. The diagnosis of hysteria and this treatment method were common at the time this was written in 1892. The woman becomes obsessed and fixated on the wallpaper as there is nothing better to do. She becomes convinced that a woman is crawling around on all fours behind the wallpaper and becomes obsessed with freeing her. While the link towards the supernatural here is tenuous as this is most widely recognized as a story of madness and how women were treated by mental health professionals. The character herself does believe that there is something supernatural happening with the wallpaper and her husband is convinced of her lucidity.

An artistic depiction of The Yellow Wallpaper

These historic links between the subject of psychology and the horror genre are numerous and continue to this day in various pieces of literature, movies, and television shows.