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There is an episode in season 6 where the writers tell the audience that every episode you've seen on the show has been in Buffy's head who is suffering from schizophrenia and is in a mental hospital. In season 5 when she "died", it was actually her recovering and coming back to reality. This lasted for 6 months before she ended up relapsing back into the dream world, which is where the whole resurrection thing occurs at the start of season 6.
The backstory for this was told in the comics in which Buffy burnt down her school's gym because she believed she was fighting "vampires" and when she told her parents about this they thought she was crazy.
The character was sent to a mental institution at this point where her condition deteriorated even further and she lost track of reality and continued her life in a fictions universe inside her head. The dream world starts off right where she burns down the school, but rather than being sent to a mental hospital, she imagine that she went off to Las Vegas with a man named Oliver Pike; he was Buffy's friend in high-school who helped her burn down the school in real life. It should be noted the man named Pike is very similar to Spike, who is a vampire that Buffy later falls in love with on the show. Angel is also a fictitious creation made in Buffy's mind, but may be based on a real person that Buffy was in love with/obsessed in real life.