Coma Theory

During their playthrough of Paper Mario, Alex and SungWon theorized that after Mario fell 1000 feet from Bowser's Castle at the beginning of the game, he went into a coma, and the events of the game were all a dream. This fan theory has the eponymous hashtag #comatheory.

Evidence
When Mario is recovering in the Toad House in Goomba Village, Toad asks him "Maybe you just had a dream?" . Later, Kammy Koopa proclaims "Your world is ours now!" as if she is standing by Mario's bedside, his life in her hands. Numerous "cracks" in the wall are also seen throughout the game, representing the fragility of Mario's dream world.

Toward the end of Mario's dream, Peach's castle is shown floating around in heaven, after everyone in the dream world has died. This is also the secret ending to Paper Mario.

Other Comas
If the coma theory is real, Goompa's fall must also be considered. Alex and SungWon theorize that the Goompa in Mario's dream world is a ghost, having crossed over from his own coma .Goompa's ghost appears later, saying "Maybe you should've listened to my advice, dipshit."

Mario wakes up from his coma in the final episode, but immediately goes into a second coma, where he dreams about the party members getting invitations to a party.

It is revealed later that, after Goomba King was defeated, a fell into a tree and also went into a coma.