The correct answer is: "He was suffering an hallucination and believed that he was fighting against a giant"
Quixote is the main character of the most important novel in Spanish literature written by Miguel de Cervantes. He was a man who read so many books about knights and heroes that they drove him crazy and he believed he was a knight fighting against the evil.
Inside this crazyness, he suffered intense hallucinations, such as when he stood against the mills thinking that they were giants, and right after ran with his horse to attack them.