You are probably dissociating all the time and don't realize it. Let's look at just what I mean by this bold claim.
Disclaimer: I'm not a medical professional, and although I'm talking about "dissociation" here I definitely don't mean to give medical explanation or advice about clinical dissociation. I'm going to talk about the same mental phenomena that cause clinical dissociation disorders, but focus on situations and people for whom it doesn't rise to the level of disorder. If you are seeing or think you need to see a medical professional about dissociation, maybe don't read this if you think reading about dissociation might make it worse and don't disregard medical advice in favor of anything I say.
Much of my claim that most people are dissociating frequently depends heavily on just what I mean by dissociation, so let's start by trying to nail down just what I mean by this term.
Clinically dissociation is "a disconnection between a person’s thoughts, memories, feelings, actions or sense of who he or she is." That's general enough to cover all phenomena psychiatric professionals would like included as "dissociation" but doesn't cleanly distinguish dissociation from other conditions like schizophrenia and psychosis on its own. Helpfully there are a few specific disorders that count as dissociation: depersonalization disorder, derealization disorder, and dissociative identity disorder. These disorders point towards concrete experiences people have that will help us explore dissociation.
NB: Each disorder includes phenomena that, on their own, are not necessarily indicative of disorder. That is, it's totally normal to experience depersonalization, derealization, or some level of identity dissociation without it being disruptive enough to be a disorder. My understanding is that standard criterion to test if is something a psychiatric disorder is to check if it significantly interferes with a person's ability to live their life as they would like to.
Depersonalization is probably the kind of dissociation most people have clear memories of having experienced: it's a kind of disidentification with the self. Some people describe it as being out of their body; I might describe it as being trapped in my head, failing to identify with the body in which the mind sits like a homunculus. The mind and body seem detached, or the body seems unreal or fake, or in some cases even parts of the mind might seem to be not the real self. Something like looking in the mirror and feeling like the person staring back isn't really you, or seeing your thoughts pass by and not identifying as being the one who thought them.
Derealization is basically the same thing as depersonalization, but about the environment beyond the body. A kind of feeling like the things and people around you are fake or that you don't inhabit the same plane of existence as they do. I'd say it's sort of like feeling you're walking around inside a video game or movie of your life and may include a feeling of lack of agency.
Identity dissociation is a bit different, as it involves a person having more than one identity or "personality state" (cf. ego states). Although in the disorder case these identities may be so strong as to cause amnesia between them when one is actively being identified with, the more common experience is something like becoming "a different person" in different scenarios, like maybe you're a party animal Friday nights and a reserved church goer Sunday mornings. Somewhere in between lie things like tulpas and IFS and feeling like your mind is made up of multiple agents.
What these experiences have in common is noticing some kind of split related to identity. In fact, "dissociate" literally means to come apart from being joined (the same etymology holds for the synonym "disassociate"). We've talked a bit about what results from the coming apart, but what was joined in the first place that could be split?
The idea in each case is that identity is somehow experienced as not unified with the rest of reality. With depersonalization this is identity splitting from unification with the mind or body such that thoughts and actions aren't recognized as belonging to the self. With derealization it's identity splitting from surroundings so the self no longer feels it's part of the world. And with identity dissociation it's identity seen as made up of multiple parts that either take turns being the "real" self or collaborate to form the self.
So if I try generalize what's going on here, I'd describe it as splitting a joined or unified experience of reality into parts.
What I find fascinating about dissociation is that we categorize it as an abnormal state, or at least notice it because it surprises us (causes us to perceive the world in a way we didn't predict), and inherent in the concept of dissociation is the idea that there's an alternative, unified state, and that unified state is the natural state that can be split apart rather than the reverse. Yet we know the brain is made up of lots of different parts that communicate with each other, and if we look really hard we can't find anything that is the irreducible center of identity. Further, we know that, however it is that attention/consciousness works, one of its features is that we only pay attention to one thing at a time, but can rapidly switch between objects of attention such that it can seem like we're paying attention to a lot of stuff at once. This would seem to suggest that dissociation should be the normal, expected state of simply noticing how the brain works, yet it feels unexpected when experienced nonetheless. What gives?
I think what's going on is a clash between how we conceptualize identity and how our minds form. Specifically, identity is an after-the-fact model we have of ourselves that we keep updating to match what actually happened, and our capable but limited powers for self-modeling lack enough structure to stuff in all the complexity we can observe into the model, thus putting us in a place of continually be surprised that our inadequate but best effort model fails to predict what we observe about ourselves. When this becomes the focus of attention, we label that feeling dissociation, but in fact we are dissociated from the reality of our existence all the time because our maps of ourselves are not exactly the territory.
So should we do anything about all this dissociation?
Not necessarily because, so long as dissociation isn't so disruptive to living life that it becomes a clinical diagnosis, it's just recognition of the basic fact that our models of ourselves involve abstractions that aren't perfectly predictive of our experiences.
That said, I think there are a variety of sub-clinical sources of suffering in life caused by excess dissociation. In particular, I'm thinking of suffering of the sort caused by overly identifying with how you model yourself, like the pain of not being as smart, successful, attractive, etc. as you think you are or should be or the failure to fully enjoy life because you're too focused on how you much you think you'll like or dislike something rather than how much you actually like or dislike it when you experience it. But there's also subtler forms of suffering caused by dissociation, like the existential dread that can come from noticing the modeled self is not as permanent as you'd hoped.
If you want to do something about it, there are many possible practices that can help. Meditation is one that will help you by studying the self. Another is Focusing. Another, more social version might be various authentic relating practices like Circling. All of these work by showing you where your model and reality don't quite match up and offer you the opportunity to learn more about yourself and become less surprised at what it is like to be you.
NB: None of them are a substitute for psychiatric care, though, so if reading this leads you to suspect you are suffering from a dissociative disorder, I encourage you to consult with a mental health professional.