The Ganymede Takeover, by Philip K. Dick and Ray Nelson, Ace, 1967. I recently reread this novel although it ranks somewhere in the lower echelons of Philip K. Dick's 45 novels in terms of literary quality. A friend had mentioned it as his favorite PKD work and took me to task for having underrated it in my 1988 study Philip K. Dick. I can't say it impressed me very much this time either, though my friend is right, the book is quite funny, and in that respect it does recall some of the more humorous Dick titles such as Clans of the Alphane Moon. That said, Clans is a much better book, but the point is that all of PKD's novels of the 1960s do in a way constitute one meganovel, which includes everything from The Man in the High Castle (1962) through Flow My Tears, The Policeman Said (1974). See this link for the complete list of PKD books published between those dates; they can be read in any order. (Lies, Inc. sits toward the bottom of this listing but should be included as part of the meganovel.)
In The Ganymede Takeover the Earth has been taken over by giant intelligent worms from Ganymede who share a group mind. One of the rulers, called Mekkis, is given Tennessee to govern, which is considered a pretty terrible assignment. He has to deal with an internal war between the racists and a black power group. Mekkis cannot focus much on politics, however, because he becomes so obsessed with the topic of human psychiatry that he eventually causes the whole Ganymedan race to self-destruct by infecting its group mind with his visions of an existential hell.
There is also a telepathic radical, Percy X, who is leading a revolution but becomes so unbalanced that he almost destroys the world with a "hell weapon." This is an apocalyptic scenario that the human race ends up narrowly avoiding in the end. It's a real 60s novel; one could imagine a version directed by Stanley Kubrick, with maybe Godfrey Cambridge as Percy X?
This book was a collaboration with Ray Nelson, who was also a cartoonist and inventor of the propeller beanie. Again, it does not represent Dick's best work when considered in isolation, but if you're reading the other PKD novels of the 60s, which are extremely addictive, by all means add it to your list. These books sometimes tend more towards the sociopolitical, as in the case of The Penultimate Truth, The Game Players of Titan, and this one, while others like Ubik are more ontological, or gnostic like A Maze of Death, or concerned with the relationship of empathy to human consciousness as in Do Androids Dream of Electric Sheep? To me, this meganovel ( consisting of 22 novels in all) is Dick's greatest work, and one of the landmarks of twentieth century literature.