There is a saying I particularly like: "Denial is more than a river in Egypt." As jokes go, it's a bit lame, I'll admit. However, it would be a mistake to let the bad pun mask the wisdom this saying captures.
Denial is a very powerful psychological defense. It is the way our psyches protect us from information we might not be able to handle. When a certain awareness or piece of information would threaten our equilibrium, in steps denial, blocking access.
Sometimes information will hang out in denial limbo indefinitely, until or unless something changes that forces it into our awareness. Other times, our psyche will gradually ease the information into our awareness in small, manageable pieces, allowing us to integrate it without becoming too overwhelmed. Denial associated with grief works that way, slowly acclimating us to the loss. Whether the information is gradually allowed in or not depends both on how risky it is (i.e., how intensely it might affect us), and whether long-term denial is feasible (e.g., it's hard to maintain denial in the face of loss when the other person is conspicuously absent).
When it comes to therapy, denial may be subtle or obvious. It is most famously associated with addiction, where a person may persistently fail to recognize the problem in spite of being confronted by increasingly severe consequences. However, it also plays a role in other problems. In developing psychosis or bipolar disorder, for example, individuals often deny that they have a mental illness, frequently leading them to refuse treatment and discontinue medications. The result unfortunately tends to be a series of hospital admissions, until the denial finally breaks down and the person accepts ongoing treatment.
It can be incredibly frustrating for family, friends, and providers to watch this process. There is often an urge to shake the person, and confront them with irrefutable evidence so that they will have to acknowledge the problem. However, I would caution against this approach - denial serves an important function in maintaining ego functioning, and breaking it with force can precipitate rapid and significant decompensation. Not a desirable result. No, as painful as it may be to witness, it is better to let the psyche do its job and gradually introduce information at a rate that it can be integrated.
Another important caveat: denial can come and go. It isn't a one-way process where, once something is acknowledged, it continues to be acknowledged. I frequently see clients who come into treatment recognizing that there is a problem, only to then talk themselves out of believing that the problem exists. I find that expressing confusing and reminding them of their initial perspective helps keep denial at bay, without disrupting their equilibrium.
Where do you see denial in your practice? How do you understand and work with it?