Hypnosis is a naturally occurring altered state of consciousness in which the critical faculty is bypassed (mind in the conscious mode) and acceptable selective thinking established. This simply means that the reasoning, evaluating, judging part of your mind (conscious) is bypassed.
Most people are in a state of 'hypnosis' around 80% of a normal day. Most people do their jobs in this state of mind. Other examples are; watching TV, driving, on the phone, daydreaming/planning/worrying, and reading a book. The typical signs that a person is in some level of hypnosis are; time distortion (time passing more quickly or slowly than it has), and hyper-focused attention.