What exactly is Schizophrenia??

My uncle isn't exactly the most "normal" person ever....he talks to himself quite a bit but he doesn't have a conversation with "himself", he seems to set up scenarios in his head (one that I seem to overhear alot is him being a huge basketball star) and then he just plays them out as if he's telling himself a first person story.....he doesnt' have conversations...just talks with nobody else there...it's complicated. What my question is, is when a person is a Schizophrenic...do they have conversations with themselves as if another person is there?? or do they do what my uncle does..?? Kinda curious, cause he's never been diagnosed with anything, nor has he gone to a doctor about it.....