Madness is literally a state of mind

This jagged crown of twisted metal is rumored to have been created by Tharizdun, the god of madness and trickery, before the rest of the gods locked him away for conspiring with Cthulhu. It was gifted to the leader of the Cult of Tharizdun and used in a dark ritual intended to raise the god from his imprisonment. The cultists failed in this ritual and were killed in the attempt. But the crown remained.

It allows the wearer to cast Crown of Madness as an action without the expenditure of a spell slot.

This is a God-Touched item