I, too, have struggled in the past with the definition of that squirrelly umbrella term, “Paganism.” I wrote about it here and on other forums in the past. I have joined in the yearning for a better term (something with more chance of actual adoption than “Canar” or “Zimmelblob.”)
Then I started thinking about it again, and realized it is actually simpler than I was thinking. We were all trying to be too specific. Here’s an actual definition, bigger than a sound-bite, but smaller than Drawing Down the Moon, that I believe covers all of us:
A modern Pagan (Neopagan) is a person who identifies as Pagan, and whose religious or spiritual practices have one or more of the following characteristics:
1. Polytheism, including recognition of multiple deities and relationship to one or several of the deities of ancient cultures, primarily those of Europe, the Near East, or North Africa. This may include more or less reliance on ancient texts and intent to reconstruct what the ancients did. This does not require a specific approach to theology: Pagans do not agree on the virtues of pantheism, panentheism, henotheism, bitheism, etc. Only exclusive (i.e., intolerant) monotheism would be excluded.
2. Belief in and relationship with spirits (similar to animism).
3. Belief in and practice of magic.
There, that was easy (almost)! I am, of course, expecting someone to point out that defining Paganism partly in terms of magic is a classic ignotem per ignotius. Since the definition requires that the individual self-describe as Pagan, it sweeps away all of those “but that definition also includes Hinduism” objections. The most important point is that it is very hard to use this definition to say that a person is not Pagan.
The religious movements under this umbrella have been evolving rapidly and developing and refining their shared discourse. When I find myself being frustrated with aspects of this process, or thinking it is too slow, I just adopt a 20 km and 500 year perspective, and it gets all better.