First of all I think it’s worth clarifying the issue somewhat, whilst the definition that you give above in no way excludes governments it is not saying that war is a terrorist act. War is a legitimate political action (“War is a mere continuation of policy by other means” – Car Von Clausewitz in On War); it is conducted within a framework of rules (i.e. the articles of the Geneva Convention) and is directed at the military, governmental and support infrastructure of a country. Terrorism on the other hand is an illegitimate political action; it is conducted outside any framework of rules and is directed at the civilian population. A very simple example of this would to be to point out the fact that Soldiers are required to wear uniforms, whilst terrorists are not.
I’ve just found this definition on terrorism for one of my seminars at http://www.unodc.org/unodc/terrorism_definitions.html and I believe it to be a more explicit explanation of the terrorist phenomenon.
“Terrorism is an anxiety-inspiring method of repeated violent action, employed by (semi-) clandestine individual, group or state actors, for idiosyncratic, criminal or political reasons, whereby - in contrast to assassination - the direct targets of violence are not the main targets. The immediate human victims of violence are generally chosen randomly (targets of opportunity) or selectively (representative or symbolic targets) from a target population, and serve as message generators. Threat- and violence-based communication processes between terrorist (organization), (imperilled) victims, and main targets are used to manipulate the main target (audience(s)), turning it into a target of terror, a target of demands, or a target of attention, depending on whether intimidation, coercion, or propaganda is primarily sought" (Schmid, 1988).
That said I do not think that this gives us a balanced and objective view of terrorism. I recently watched “The Battle for Algiers” a very informative documentary style film about the FLN in Algeria. One quote sticks with me though:
Journalist: M. Ben M'Hidi, don't you think it's a bit cowardly to use women's baskets and handbags to carry explosive devices that kill so many innocent people?
Ben M'Hidi: And doesn't it seem to you even more cowardly to drop napalm bombs on defenseless villages, so that there are a thousand times more innocent victims? Of course, if we had your airplanes it would be a lot easier for us. Give us your bombers, and you can have our baskets.
This I think sums up the opposing argument, terrorism is the only methods that a lot of these people have left to resort to… and lets not forget both the US and Israel were founded upon the actions of terrorists.