Eoin Morgan’s side is currently in the midst of a five-match ODI series in West Indies where they lost six wickets for 35 runs in the second ODI and afforded the hosts a series equalising win. The third ODI was washed out in Grenada.
"England have got everything required to win the World Cup except for these moments of madness," Vaughan said on BBC Radio 5 live's Tuffers and Vaughan show.
"It happens every four or five games and if it happens in the semi-final then they are out."
In October when England were touring Sri Lanka they were handed their heaviest ODI defeat against them after a batting collapse saw them finish more than 200 runs short of the target. However, the ODI series had been wrapped up before the fifth game.
According to Vaughan, England have the experience to stop such collapses but have work on their mentality.
"If you're out there in the middle - win the game, don't leave it to anyone else, don't get bored of doing what you're doing well," he said.
"This England team has been great. They have trained the brain get 330. It has been lovely to watch.
"But it may be that they get to a semi-final and 270 would be enough and if you go for 330 to 350 then you might only get 210.
"You don't win a World Cup by just whacking it. You have to play smart cricket."
“The India side around the time they won the 2011 World Cup didn't have the day England had in Barbados on Friday," Vaughan said.
"The Australia side that won in 2015 lost the odd game but they didn't have moments like England do on a consistent basis.
"It's not a [whole] game, it's almost just a period of the game - in that Champions Trophy semi-final against Pakistan, it was just 10 or so overs where England lost four quick wickets and the game was over.
"That's my concern for them in the World Cup."
The former captain believes England’s strength lies in batting but it is also the department that is likely to let them down when under pressure.
"England do get bored if they're not whacking it - if they have not struck a boundary in 10 balls they think, 'I have got to hit one'," he added.
"It is the only thing I look at the team and worry about - if they are under big pressure in a one-off game and the ball is doing a bit and they go gung-ho.
"If they continue to play in that fashion they will have games where they completely dominate.
"But they also have that one game, where I still have a bit of doubt that they might not be smart enough to see themselves through a 20-over period when a bit of old-school cricket might be required."
England have another 10 matches in the bank before they open their World Cup campaign on May 30 against South Africa.
First Published: February 26, 2019, 4:41 PM IST