As the main is taken biological factor. Direct neuro pathology (including by genes) and/or secondary (including infections).
The conditions of life - physical, emotional - are thought as predisposing and provoking factors, which lead to disorders for those who had biology anomalies. Similarly exist positive conditions which may oppose or revert disorders.
Up to 20% of humanity may have significant biology predisposition to psychiatry disorders. At least, in today common life conditions. 1-5% to hard disorders, as psychoses.
A common human may get the similar symptoms in case of traumas, toxins, infections, lack of nutritions. Which can happen before borning too.
About physical side of psychoses. There was experiment when blood of people with delusions (seems with schizophrenia) was inputed to healthy ones. Those got delusions too on some days.
> It doesn't seem like it can just be reduced to "DJ Arendee has hereditary insanity"
The common understanding is multifactorial. Genes identical twins not obligately have same psychiatry disorders on a time or during the life. For schizophrenia it's ~50% match.