The best scholarship on this issue, in my view, comes from Remi Brulin, who teaches at NYU and wrote his PhD dissertation at the Sorbonne in Paris on the discourse of Terrorism. When I interviewed him in 2010, he described the history of the term — it was pushed by Israel in the 1960s and early 1970s as a means of universalizing its conflicts (this isn’t our fight against our enemies over land; it’s the Entire World’s Fight against The Terrorists!). The term was then picked up by the neocons in the Reagan administration to justify their covert wars in Central America (in a test run for what they did after 9/11, they continuously exclaimed: we’re fighting against The Terrorists in Central America, even as they themselves armed and funded classic Terror groups in El Salvador and Nicaragua). From the start, the central challenge was how to define the term so as to include the violence used by the enemies of the U.S. and Israel, while excluding the violence the U.S., Israel and their allies used, both historically and presently. That still has not been figured out, which is why there is no fixed, accepted definition of the term, and certainly no consistent application. [Emphasis added]As Greenwald notes here, when the term "terrorism" is used, it generally has no widely accepted definition, but is instead an example of a Persuasive Definition. That is, it is a definition, the purpose of which is not to shed insight into a concept or identify some newly discovered phenomenon, but is there simply to influence attitudes and stir emotions. As the bolded sentence above states, the purpose of the use of the word "terrorism" is not to label a specific phenomenon, but rather to attack our enemies while at the same time insulating ourselves from criticism when we do exactly the same things that our enemies do.
As an illustration of this later point we can look at what has come to be known as the "double-tap" policy. Glenn Greenwald discusses this at length in another post that is also worth reading. The basic idea here is that the US will bomb a group of suspected terrorists (often killing large number of civilians in the process) and then when rescue groups show up to help the victims of the first bombing they will then bomb those people as well, apparently under the assumption that anyone helping out someone suspected of being a terrorist must also be a terrorist. As Greenwald notes in his analysis, it appears that the US may have learned of this technique from observing the activities of various terrorist groups. Or perhaps military planners have been reading The Hunger Games.
This ties back into the larger point about persuasive definitions because it demonstrates the meaninglessness of the term "terrorism." If the US and so-called terrorist groups are employing exactly the same tactics and methods, there is no legitimate way to argue that one is legitimate while the other is not. If it is wrong to target civilians, medical personnel and other first responders, then it is wrong regardless of who does it. The only way to avoid this unsettling conclusion about the immorality of US actions is to hide behind language and persuasive definitions as the US does in its application of the words "terror" and "terrorism."
Juan Cole adds to the discussion by discussion the differences between White Terrorists and Others. As with Greenwald, he says it better than I could, but it again points to how meaningless the term "Terror" is, and how it is basically a tool (a persuasive definition) used to criticize and demonize people we don't like while avoiding an examination of our own shortcomings and deficiencies.