Is there an early stage of development that creates psychosis?

This question comes from the difference between paranoid personality disorder and paranoid schizophrenia.

I've worked with a few people with paranoid personality disorder who have shown fantasies of 'imminent war'. There is a sense that at any moment a war or battle can break out in which there will be a number of enemies, explosions, and danger from both people and the immediate environment.

In these individuals, there is a grandiosity that comes from identifying with the parental imago (i.e. the expectation of the imminent war is a projective identification from the self imago that is projected into the people and environment around them). However, even though this is an early imago and it's possible that this defense could give them a psychotic like break from reality, they show higher levels of functioning too. In a mechanistic, "tube" conception of libido, I thought that the defense would take energy away from higher functioning, and it might, in some degree, but there is still a huge difference between paranoid schizophrenia and paranoid personality disorder.

This difference is most clearly stated in the fact that those with paranoid personality disorder are still working, in relationships, and more attached to the social body. This means that they haven't regressed from functioning at higher levels.

The question here is whether regression from higher levels is an operation that is part of an attack on the level, from some mechanism formed in the level itself, or if there is some earlier defense (maybe something like scotimization) that is part of an early level that is required to regress from higher levels.