Hallucination. If she sees some news?

Hi doctor, I am writing this query for my grandma. She is telling something everyday which is actually not happened.while watching TV, she will relate everything to her life (if one guy is arrested in news and if name of guy is her brother , she will relate to her life). Also she thinks that somebody is living on terrace of house and claiming that they are trying to steal her house and properties around house. One day she prepared food for those imaginary peoples (people on terrace) and she told that they are starving. But whenever she meet a person from outside , she will smile and talk normally . She will tell everything Infront of close ones. She is having a good memory of the things happened. Also she thinks that something will happen to her house if she sees some news regarding some house demolishing news. We consulted one physiatrist nearby , but no effect . What it could be? Even we are not getting a clear picture of what is going on.