Delirium is a clinical syndrome requiring urgent medical attention. The early diagnosis of this medical emergency is essential to facilitate prompt treatment and management. In older people, the accurate diagnosis of delirium is often hampered by subjective and objective ambiguities, including lack of medical history and informants, changes in person’s surroundings, sensory deprivation, as well as their potential comorbidities and polypharmacy. In the current review, we address the difficulties in diagnostic accuracy between delirium and dementia. We review the latest diagnostic criteria and screening instruments to aid the diagnosis of delirium and how to differentiate between acute (delirium) and chronic (dementia) brain failure. In addition, we also provide an in-depth summary on underlying neurobiological substrates of delirium and address the management (i.e., prevention and treatment) of delirium.