So how did the word "bedlam" come to mean a place of uproar and madness?
Bethlem Royal Hospital, also known as St Mary Bethlehem and Bedlam, was founded in 1247 during the reign of Henry III of England, as the Priory of the New Order of St Mary of Bethlem in London. By 1377 the priory had become one of the institutions in Europe to look after the mentally ill, or, as they were called then "the distracted".
The Dissolution of the monasteries was an event that happened from 1536 to 1540, when King Henry VIII took away the land and money that the nuns and monks of the Roman Catholic church owned. The hospital of St Mary of Bethlehem was closed down as a priory and secularised, coming under the control of the city of London exclusively as an asylum for the insane.
The hospital became a tourist attraction, where sightseers paying an entrance fee of twopence each, could amuse themselves at the patients' antics. Often the patients were teased and provoked by the general public into a raving frenzy. By this stage, the hospital had become known by its shortened name, Bedlam.
The word "bedlam", meaning uproar and confusion, is derived from the hospital's nickname. Although the Bethlem Royal Hospital became a modern psychiatric facility, historically it was representative of the worst excesses of asylums in the era of lunacy reform. (Source The Encyclopedia of Trivia