You are under the influence of drugs; or metaphorically "you're being unrealistic"

you're tripping = freaking out = out of control in a panic

for me tripping is that your thinking of something to other or to something that make you feel fine. cowboy...

Apart from the previous answers it can also mean that you are actually falling down. Example: Watch out for that big rock, you're tripping over it"

This is primarily used by young African-Americans, however it is used by all American youths. To "be trippin'" (the "g" in the suffix "-ing" is usually not pronounced) can mean either that 1) someone is out of control; or that 2) they have a misconception. Ex for use 1) "Calm down. Stop trippin' about how they got your order wrong at McDonald's." Ex for use 2) "You're wrong about how I make poor grades in school. I make good grades in school; don't be trippin'." There need not be an "-ing" suffix either, so that the term can be used in this way as well: "Don't trip." It is never said that someone "tripped"; only that someone was "trippin'."