I find myself agreeing with @glacial , I would define it very much like that, all be it with some minor differences and/or extra parts.
To me, the IRA, and ETA, are terrorists, because they are a group of people, who use terror tactics to achieve a goal.
However, a group of 6 guys who get cornered in a bank with hostages and a list of demands, causing terror by threatening to kill hostages if they don’t get what they want, are not terrorists. Despite causing terror, and using terror to get what they want, their main goal is profit, and the terrorism aspect just a coincidental element. Unless they planned to take hostages as part of the plan from the start, then they would be terrorists.
Alcaida are not exactly terrorists in my definition either, while they are actually a group, who use terror to get what they want, I don’t classify them as terrorists, because their demand is too insane and unreasonable. Their demand namely being “DIE!!!”
If the “terrorist” has a demand that he wants everyone to die, or wants a 20ft hat made of cheese, or wants to talk to god, then they are more of a maniac than a terrorist.
I would also say that there has to be some level of credibility in it. If it is 1 or 2 guys, then they can’t really be terrorists, because their goals are just too unrealistic. While it is unlikely that ETA will ever achieve their goal of independence, they are at least big enough to be a serious threat, that will perhaps in some unlikely future have some success.
If it is 1 or 2 guys, they are loner maniacs, mass killers, and so on, if the group is big enough, they can be terrorists, but if the group gets too big, then its a movement or an army, or an agency.
I don’t really like the liberal use of the word terrorist, for several different reasons. I think it gets people in to the wrong mind set, that leads to extreme actions. I also think it is a form of linguistic trickery, to further the us vs them tool.