An abbreviation of either schizoid, schizotypal or schizophrenic. Or more likely, a general insult used to imply someone is 'crazy'.
There's a set of diagnostic criteria for these disorders (readily available on Wikipedia). Schizophrenia is the most severe (actually a psychosis) and can be either 'positive'(characterised by mainly auditory hallucinations) or 'negative' (social withdrawal etc..). Schizoid personalities do not experience psychotic periods and are just people that are happy to live in their own world and for the most part, shun social contact. Schizotypals fall somewhere in between: they are withdrawn and don't have the hallucinations of the schizophrenics but they can be prone to odd paranoias and beliefs (for example, the belief that people can read minds).
Schizophrenic: "That guy over there hears aliens talking to him- total schizo!"
Schizotypal: "That guy over there thinks that people can read minds- total schizo!"
Schizoid: "That guy over there never says a word- total schizo!"
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