The narrator of Charlotte Perkins Gilman's "The Yellow Wallpaper" is in a fragile mental state, and instead of being helped by her isolation, she is able to form a fantasy world out of small external stimuli. One of her obsessions is the wallpaper in her bedroom, which is old, peeling, and such a strange shade of yellow that she imagines it has an odor.
On a pattern like this, by daylight, there is a lack of sequence, a defiance of law, that is a constant irritant to a normal mind.
The color is hideous enough, and unreliable enough, and infuriating enough, but the pattern is torturing.
You think you have mastered it, but just as you get well underway in following, it turns a back somersault and there you are. It slaps you in the face, knocks you down, and tramples upon you. It is like a bad dream.
(Gilman, "The Yellow Wallpaper, library.csi.cuny.edu)
The narrator is slowly losing her mind, and this is echoed by her room; it is slowly losing its wallpaper, which gives it personality and texture. As she deteriorates, she peels the wallpaper away, exposing more of the wall underneath, and exposing more of her eroding mind. As she removes the wallpaper, she feels more stable and secure in her fantasy, and when the last of the paper she wants to remove is gone, she is able to create a "space" for herself on the exposed wall; she has turned her mind into itself and now "lives" in the space between the wall and wallpaper. In this way, the wallpaper acts as a symbol for her sanity; although it is ugly, it serves a purpose (as does her cultural sanity), and as she tears it off, she becomes more insane, even as she feels better.