Judas Tree by Simon P. Clark
Voros is the place where people go to become insane. Voros is a Greek island full of ghosts that, although unseen, make their presence felt through the minds of the inhabitants. The islanders seek to possess one another but none, at first, realise that the island itself is possessing them. They are afflicted by a subtle madness, not discernible at first, but growing in tempo until the central character realises that she must either escape this haunted island or stay there forever.