They are delusional as hell. Luna was a child, so it's more forgivable, but Luna's father is a mature adult, yet he still believes some crazy stuff. At least I'm not as blind as Xenophilius and the people who think he isn't delusional.
Yes, that's true, but Xenophilius was the chief editor of a hoax newspaper. If he wasn't delusional, he would be a greedy and manipulative news editor.