In ‘Diary of a Madman’ a minor government official, who is off kilter to begin with, in 19th century Russia falls in love with the daughter of the head of a department of the Russian government. The minor government official can never marry the daughter of the head of the department due to the terrific differences in social classes, wealth and positions between the two. At some point the minor government official arrives at the conclusion that he is King of Spain. Gogol pushes that the minor government official concludes that he is King of Spain as then he would be is position to marry the daughter of the head of the department.
Someone with a psychosis who arrives at he conclusion that he has a position with great power does so as he finds himself apparently wielding great power so he must be someone who has a position that wields great power. With the World apparently entirely inside one’s head one apparently has terrific wherewithal. Madmen do not conclude they are emperors or kings to compensate for having lowly statuses but rather conclude they are emperors and kings because they apparently have great powers.
The madman in ‘Diary of a Madman’ who held he was King of Spain had no interests in Spain which does not fit with how psychoses work. Had the madman in ‘Diary of a Madman’ had various plans for saving Russia, was actively working on such plans and had great powers so he had to be Czar of Russia that would have fit a psychosis lots better. Czars of Russia were not per se mad. Disappointments in love of the lowly do not to lead to mad beliefs as to positions held.