The term 'dangerous lunacy' implies that Hamlet is a person who has descended into madness resulting in effects of harmful physical behaviour to both himself and others around him. Conversely, Ophelia's 'genuine insanity' denotes her to be one who has been the victim of several events to the extent that she passes mentally to an irreversible state of madness. Differences between lunacy and insanity can only be applied when addressing each term to different situations. This means essentially, that on a conceptual basis, Ophelia's genuine insanity does greatly compare to Hamlet's dangerous lunacy as they are both suffering from the same illness. Hamlet puts on an 'antic disposition' to mask his true intentions but in doing so passes at some instances into real acts of lunacy whilst Ophelia begins the play sanely leading a contented life but, by the turn of events, her mood deteriorates as a result of a build up in dramatic and depressing situations that put her upon a point of insanity from which there is no return.
The medical aspect of madness in 'Hamlet' to an Elizabethan audience would have been viewed as an illness of physical matter rather than our more progressed theory today of it being a problem of the psyche. E.M.W. Tillyard explains the Elizabethan concept of 'humours' that control the personality and temperament of human beings: "Pituita", "Melancholy", "Blood" and "Choler". An imbalance of these can cause various forms of depression as well as a variety of physical ailments including madness or insanity.
This in relation to Hamlet and Ophelia's positions within the play shows, by the dramatic events that occur within the play, a severe imbalance in humours resulting in an Elizabethan audience viewing both characters with the same diagnosis of various forms of depression, madness and or insanity.