'Alice in Wonderland Syndrome' (AiWS) (a.k.a. Todd's syndrome or dysmetropsia) is a neuropsychological disorder in which patients experience visual* distortions - so that surrounding objects can appear larger or smaller (or nearer of further away) than they actually are.
It's known to be associated with infections of the Epstein-Barr virus - and also brain tumours and. But the neuropsychological mechanisms are unknown.
It was originally assumed to be a very rare condition, although recent surveys have found that around 9% of people have experienced it at some stage. source
*Note: It can also feature auditory and time-distortion illusions.
Further reading : BioMed Research International