Another way to say that someone is not quite "right" in the head. Usually accompanied by a knowing look and a nod along with the hand lightly tapped to the forehead.
Fred would say about Lamont "That boy is touched" if he hooked up with a white girl.
Or if you are trying to explain why you fizzled something at work, you could pat your head and say "I'm touched"
someone who's just a littleextra f*$ked up in a very wierd/almost non-tolerable sort of way.
Many peoplethought the works of Picasso, Van Gogh and Igor Stravinsky were touched because they grasped concepts that were very hard to understand for their time.