Aceasta este o nebunie.

Both can mean this, but they are not used in exactly the same way.

• aceasta is the fuller, more formal form
• asta is shorter and much more common in everyday speech

So in conversation, many Romanians would naturally say Asta e o nebunie.
The version with aceasta sounds more careful, formal, or written.

Aceasta is the feminine singular form of the demonstrative pronoun.
Acesta is the masculine singular form.

Romanian demonstratives agree in gender and number with the noun they refer to, even if that noun is only implied. So aceasta usually points to something understood as feminine, such as an implied noun like situație or idee.

In very general everyday speech, speakers often avoid this issue by using asta, which is much more neutral in practice.

Este is the verb is.

Yes, you can very often replace it with e:

• Aceasta este o nebunie.
• Aceasta e o nebunie.

Both are correct.
Este sounds a bit more formal or careful; e is very common in normal speech.

O is the feminine singular indefinite article, equivalent to a/an in English.

Because nebunie is a feminine singular noun, Romanian uses o:

• o nebunie = a madness / a crazy thing

So the structure is:

• aceasta = this
• este = is
• o nebunie = a madness / a crazy thing

Yes, nebunie is feminine.

You can tell here because it takes the feminine article o:

• o nebunie

Its definite form is also feminine:

• nebunia = the madness

Many Romanian nouns ending in -ie are feminine, though you should not rely on the ending alone in every case. The article is often the clearest clue.

Normally, no. In this sentence, o is the natural standard choice.

So:

• Aceasta este o nebunie. = normal
• Aceasta este nebunie. = not standard in this sense

However, Romanian sometimes drops the article in short exclamations, especially in speech:

• E nebunie!

That means something like It's madness! or This is crazy!
But in the full sentence you gave, o nebunie is the expected form.

The normal word order is:

• Aceasta este o nebunie.

That is the most straightforward pattern: subject + verb + predicate noun.

But Romanian allows some flexibility for emphasis. For example:

• Aceasta e o nebunie.
• E o nebunie.
• O nebunie este aceasta. — possible, but marked and much less neutral

So the original order is the standard one you should learn first.

A rough English-style guide is:

a-CHEAS-ta YES-te o neh-boo-NEE-eh

A few notes:

• cea in aceasta is not like English see; it is closer to chea
• este often sounds like YES-te
• nebunie has the stress on -ni-

This is only an approximation, but it is good enough to get started.

It can be both, but very often it is used figuratively, like English This is crazy or This is madness.

So it does not always mean actual insanity. It can simply express strong surprise, disbelief, or frustration.

In everyday speech, the more natural figurative version is often:

• Asta e o nebunie!

Here it is a pronoun.

That is because it stands alone; it does not directly modify a noun. Compare:

• Aceasta este o nebunie. — aceasta = pronoun, this
• Această idee este o nebunie. — această = adjective, this idea

Notice that when it comes before a noun, the form is usually această, not aceasta.

So in your sentence, aceasta is functioning by itself as this.