There are all sorts of ways to generate fear to advance political ends, and the only even-handed way to employ that term is to use it in all appropriate circumstances - which indeed would make the term so general as to be nigh-useless.
Which is my contention, and why we need to retire the word. There is nothing particularly special about head-chopping as a means of producing fear (I can think of many things scarier), and blowing up civilians wholesale is primarily the domain of governments, which are for some reason immune to the charge of terrorism even though they are far and away the biggest creators of fear for political ends there have ever been.
Chopping off the heads of members of another religion on camera is intended to terrorize the viewing audience and scare and drive members of that religion out of the area. Encouraging or financing someone to kill 80 people in a holiday crowd is terrorism. We need a word to identify who or what we are fighting. Things should be identified by a word or phrase if for nothing more than the efficient use of language. War on islamic Terrorism works for me, but I welcome a superior phrase.
I surrender the last word, before I become terrorized. : )