What is a word describing the process of understanding that reality isn't utopian?
I suggest disenchant, which Merriam-Webster defines as—
to free from illusion
If you are more comfortable with an idiom, this one from Collins fits the bill nicely—
The scales have fallen from someones eyes
I'd suggest epiphany.
Merriam-Webster is quite perspicuous when it comes to defining the term:
(1): a usually sudden manifestation or perception of the essential nature or meaning of something
(2): an intuitive grasp of reality through something (such as an event) usually simple and striking
(3): an illuminating discovery, realization, or disclosure