The "slasher" cognomen came into common usage in reaction to America's psycho-killer films of the 1980s, since many of these featured killers who brutally slashed up their victims. Naturally, the idea of a "slasher killer" was considerably older, dating back at least to Jack the Ripper. Throughout the 20th century, a number of serial killers were given a "slasher" nickname, as with the "Windsor Slasher," who committed his crimes in 1945 Ontario. Still, it should be obvious that the term doesn't capture the essence of the psycho-killer subgenre, since many fictional psycho-killers may rely on acts of strangling or bludgeoning.
The pejorative term "psycho" probably originated as a shortened form of either "psychotic" or "psychopath." However, the slang was never meant to be precise, and colloquially people use "psycho" just as easily for anyone who displays psychological problems, not just a violent psychotic. Thus a film like SECRET CEREMONY, in which Mia Farrow's character is weird but not dangerous to anyone, might be called a "psycho film" but not a "psycho killer film."
Even when the psycho is dangerous only to him/herself-- as with the 2010 BLACK SWAN-- one might choose to deem that psycho-narrative to fall within the "psycho killer subgenre/" However, I would venture to say that when most persons hear the term "psycho killer," they think of someone who is a danger not to himself but to other people, often many other people, for reasons akin to, though not always identical to, the motivations of the "serial killer." In my essay ESCALATION PROCLAMATION I stated that the authorial practice of continually escalating violence within a narrative has long been a tried-and-true method of keeping audience interest:
A single violent act, such the sort of unsolved killing that initiates most murder-mysteries—including two of Poe’s three efforts in that genre—merely serves to incite the average reader’s curiosity. What incites that reader’s deeper identification is the repetition of violence. Through repetition of violence, the reader’s potential fears for the story’s characters are escalated. Which character may die next? Can the hero save the next victim from the villain’s machinations?
So, even though technically a "psycho killer" narrative could be about a psycho who kills just one victim, or even is a danger to him/herself, the dominant *expectation* of the audience is that the psycho killer is going to be dangerous to many people.
Now, there are many films in which a killer kills many people, but the killer is not "psycho" in any recognizable way. Crime films are a pertinent example, where it's usually evident that the murderer is simply murdering his way to prosperity, in an immoral yet essentially rational manner. Yet one also cannot be a total literalist about defining psycho-killer narratives, because by weight of tradition, the subgenre includes two types of psycho:
(1) The "true psycho," who actually has some psychological breakdown that tied in to his/her depredations,
(2) The "fake psycho," who is rational but has assumed the appearance of a psychopath in order to commit his crimes. This tradition dates back at least to Edgar Wallace thrillers of the 1920s like THE BLUE HAND (which gave rise to a 1967 film). One "fake psycho" film even fakes the deaths the killer supposedly commits-- though the effect on audiences is identical up to the point that the deception is revealed.
More in Part 2.