You're not crazy ^_^ it happened to me really bad for a few weeks there.
I pinged and tracert'd my server (Kil'rogg) with some instructions from Blizz tech support, and found that the ping signals didn't go anywhere, and the route got choked up along the way with some insane response times around Vegas.
It was only happening in instances for a while. Then it would be fine in instances but happen out in the world. Autofollow was slow or nonexistant as a result.
Never figured out what causes it, but in one case one of the windows was just frozen and watching everyone run in place... yet if I typed in guild chat with her that would show up (even on her own window) but the mobs wouldn't start moving.

So blizzfail.