I had this as a little girl, and was really worried about it. That is, until I told my mom about it, and she told me she had it too when she was little and not to worry, that it would go away. I only had it at night and always thought it was so neat. I felt like my bed was a huge mountain and that the other pieces of furniture in my room were the other mountains around it. And I was standing at the peak, about 3 inches tall. I got the same awe-inspiring feeling as if you were looking at the sunset from the top of a mountain on a clear, beautiful evening. But then again, I always had a fascination with psychology too. I can imagine how this experience would be frightening every time, no matter the amount of reassurance.
Found out later that my mom and I both have Celiac Disease, which we think caused it. I think the actual condition or symptom of far-away seeing is called micropsia. Celiac can cause all sorts of strange neurological problems like peripheral neuropathy or more common ones like irritability, fatigue, and depression. I'm not saying if you have micropsia then you have Celiac Disease, but maybe take a look at other symptoms, and if you find you or your child have one or two more, maybe then consider it. And find a good symptom list that doesn't just list mostly digestive problems--my mom and I had few if any digestive symptoms. Here's a good one, from my mom's website: http://www.glutenfreeindy.com/symptoms.html
There are over 300 symptoms of Celiac Disease. I know this is an old post, but hopefully this helps someone!