Types of thinking include unrealistic/autistic thinking and realistic thinking. Unrealistic thinking involves things like daydreaming and fantasizing that lack connection to external reality. Realistic thinking, also called reasoning, helps adjust to the real world through processes like deduction, induction, and evaluation. Problem solving is a goal-directed activity that overcomes barriers through methods like trial and error, insight, and following steps of identifying the problem, assembling data, developing hypotheses, evaluating solutions, and verifying the best solution.