My definition for Terrorism is:
The deliberate use of tactics against a civilian population which are intended to cause fear (terror) amongst that population and thus cause the leadership of that population to change its policies in a direction desired by those who use the tactics.
An additional caveat would be that normally the terrorist does not present himself as a member of the armed forces of his group, allowing him to be stopped by military force.
Terror
The terrorist causes terror, but not everything that causes terror is done by a terrorist. When I was younger a doctor with a needle terrified me… but that didn’t make him a terrorist (I’m still scared of dentists).
Tactics
It is kind of implied in the ’terror’ part of the definition, but the tactics make a difference. Walking around protesting is not ‘terrorism’.
Civilian
The terrorist acts against civilians, but not every act against civilians is terrorism. Civilians present at a target of interest to the military may well be injured or killed (and definitely terrorised) by military actions against that target… but that doesn’t make those actions terrorism.
Uniformed
Since time immemorial, a distinction has been made between the actions of uniformed and non-uniformed actors. Soldiers in uniform were taken as prisoners of war, and those out of uniform were hung as spies.
Change of Policy
A serial killer will probably be out of uniform, act against the civilian population, and cause terror… but he is not a terrorist unless he has, as his goal, a change of policy. He is a psychopath, no doubt, but not a terrorist.
Why is it important?
The most important reason we need to make these distinctions is that a failure to do so leads to equivocation, the kind of equivocation that blurs very important distinctions. Let us work through an example:
Suppose a group of people burst into a hospital, hold everyone, hostage, rape all the women, throw the children out the windows to their death, pour gasoline down the throats of all of the elderly and bedbound… all the while broadcasting the whole thing along with their demands. That is terrorism.
Now, suppose that 400 people died in the above attack. Now let us say that an engineer makes a mistake in his calculations, and as a result, a hospital, in the middle of the day, falls down into a heap, and 400 people die. In both cases, 400 people died in a hospital, but the second story isn’t terrorism.
Now let us say that an army decides to obliterate a town which is a centre of arms manufacturing for their enemy. As a result, a hospital is bombed, and 400 people die. That may be a war crime, but it is not terrorism.
Now let us say that the hospital is bombed on purpose because the enemy is using it as a headquarters and launching missiles from its room. Again, 400 people died. Again, it might be a war crime… on at least one side. But, again, it is not terrorism.
Keeping in mind that for the terrorist deaths among his own people and deaths among his enemy people are both to his advantage.
Or people, out of uniform, launch a missile towards a civilian population in an effort to simply kill as many a possible, and it lands on their own hospital.