A lot of people including myself have trouble understanding how the moon eye plan would work, because it seems like every one would go into a dream world. If that were true, issues such as starvation would occur while everyone is trapped in the dream.
Mostly we can only give speculation to smaller details, but based on the manga I'm led to believe there is one alternate dimension where the jutsu would take place, rather than the whole jutsu existing in individuals' minds. A few points of evidence and clarification needed to conclude this:
1. We know alternate dimensions are possible because of Obito's sharingan ability, kamui.
2. This would mean rather than the Tsuki no Mei plan being a dream, it could be reality in an alternate dimension.
3. This would resolve the issue of people being able to nourish themselves and the like while asleep.
4. Madara brings Obito to a place whose environment he can manipulate and create.
5. That is Madara's special ability, just like Obito has kamui.
6. If Obito's kamui creates an alternate dimension, then Madara's ability could be creating an alternate dimension that he can change. He can also forcibly enter other people. Therefore, it is the same as kamui, except the user has more control.
We’ve seen Madara using his ability small-scale, and he shows his ability to make himself appear younger. Though we do not know if he was actually becoming younger, he has other methods to keep himself alive as long as he needs, as shown by edo tensei and rinne tensei no jutsu. With an accomplice, Madara would be able to control the world once everyone is captured by the jutsu.
Does that make sense?
Mostly we can only give speculation to smaller details, but based on the manga I'm led to believe there is one alternate dimension where the jutsu would take place, rather than the whole jutsu existing in individuals' minds. A few points of evidence and clarification needed to conclude this:
1. We know alternate dimensions are possible because of Obito's sharingan ability, kamui.
2. This would mean rather than the Tsuki no Mei plan being a dream, it could be reality in an alternate dimension.
3. This would resolve the issue of people being able to nourish themselves and the like while asleep.
4. Madara brings Obito to a place whose environment he can manipulate and create.
5. That is Madara's special ability, just like Obito has kamui.
6. If Obito's kamui creates an alternate dimension, then Madara's ability could be creating an alternate dimension that he can change. He can also forcibly enter other people. Therefore, it is the same as kamui, except the user has more control.
We’ve seen Madara using his ability small-scale, and he shows his ability to make himself appear younger. Though we do not know if he was actually becoming younger, he has other methods to keep himself alive as long as he needs, as shown by edo tensei and rinne tensei no jutsu. With an accomplice, Madara would be able to control the world once everyone is captured by the jutsu.
Does that make sense?