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The mentally ill are treated in hospitals and clinics that specialize in mental illness.

The term 'crazy' and 'crazy people' is a generic term that can mean anything wild, violent, oddball, enthusiastic, or strange. A crazy person doesn't equal a mentally ill person. The word 'crazy' can be a positive or a negative description. Examples:

She wears such crazy clothes.

He's just girl crazy.

When I said that, she went crazy.

He ran like crazy.

That was a crazy thing to do.

I think the word you seek is an asylum.

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Q: Whats the name of the place that people send crazy people to?
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