Yes, it is possible to die from alcohol withdrawal psychosis. People often experience alcohol-induced psychosis as a part of DTs (delirium tremens). Not only can this result in extreme confusion, and result in accidental death, but it can also lead to the onset of fatal seizures.
For this reason, people who experience alcohol withdrawal psychosis are in need of critical, emergency care.  Medical interventions can provide sedatives, 24/7 monitoring, and other evidence-based treatments can prevent these life-threatening risks in an alcohol detox facility.