Consensus reality is a reality based not upon direct experience or evidence, but upon what is popularly believed to be true. In other words, consensus reality is a collective fantasy.
An example of consensus reality is the popular belief that Islamic extremists were responsible for the crime of 9/11, despite an overwhelming preponderance of evidence to prove otherwise.
Another example of consensus reality is the popular belief that governments are essentially honest, law abiding organizations, despite an overwhelming preponderance of evidence to prove otherwise.
At the root of consensus reality is the herd-like mentality of the public mind. Humans are inherently social creatures and hence they naturally tend toward behaviours that conform with what they perceive to be socially acceptable norms. This makes humans particularly susceptible to influence by societal pressure, whether in the form of peer group pressure, regulation by authorities or manipulation by public relations and propaganda.
Let's consider some historical examples of consensus reality. There was the belief that the earth lay at the center of the universe. that the sun and the planets and the stars revolved around the earth. There was the belief (still held by a few) that God created the earth in seven days, 4000 years before Christ. The ancients attributed many natural phenomena to super natural entities or gods.
In more recent history there's been the consensus reality of the colonialists, that indigenous peoples were savages to be hunted down and slaughtered or sold into slavery, and the consensus reality of the Nazis, that Jews and Communists and the Roma were subhuman and needed to be exterminated for the national good.
Many people like to imagine that modernity has delivered us from such fanciful notions, that science and technology have revealed the true nature of the universe and our place in it. Demonstrably, however, this is not the case. Humans are still primarily driven by needs and desires that arise from deep within the human psyche, from a place where logic and reason are absent, a place that decides according to the psychological needs of the individual, not the objective reality of the external world.
For this reason, many people make the most important decisions of their lives based on how they feel and not what they think. Few people spend a great deal of time considering the factors that determine who they marry, or what career path they choose, or how many children they have or where they decide to live. Very often these decisions are made without much forethought and in accord with the nature of the contingency as it arises.
It is not surprising, therefore, that when it comes to matters of great importance and complexity, many people decide upon an opinion determined by others who appear to be authoritative and informed. This relieves the individual from the responsibility of discovering for themselves, the truth of the matter. There is some comfort in the belief that your opinion is shared by the majority - you have a stake in the consensus reality.
This position is particularly resistant to evidence since it takes as its premise for certainty, the superior knowledge of an authoritative entity, such as the government, experts, a guru or religious doctrine. The individual who holds the beliefs so acquired has no need or desire to look at evidence, since he or she can assume that the authorities have already looked at all the evidence.