Perspective
It's all about perspective. For instance:
(1) Pagan - used by Christian in a similar manner to infidel and heathen; a negative characterization of those outside the faith.
(2) Pagan - from a Roman root indicating, essentially, country folk who were left to more superstitious practices removed from the organized centers of religion.
(3) Pagan - in the modern and Western, indicative of any number of occult "crafts" including witchcraft and shamanism.
It really depends on what the discussion is; I use all three, depending on what I'm discussing with whom. Speaking to a "Bible-thumper" amid a heated political season, pagan will be used sarcastically in reference to the non-Christian masses often fashioned by religious paranoia into some massive conspiracy against the faith. (e.g. "Oh, right. I forgot. The pagans are coming. The pagans are coming. One if by land, two if by sea. The pagans are coming.)
The second rarely comes up, but was insisted on once at Sciforums by an atheist bent on insisting that Wicca was not a religion. It's occasionally helpful to bear it in mind when reading translations of source documents, as well. If I read Latin, it wouldn't be such a rare utilization.
The third is pretty commonplace today, and technically includes the last religious "system" I attempted to follow. It is often used seriously as a term by those who are not Wicca, have not gone "native," and have no real word that describes their paradigm. It's kind of a misfit term, apropos a generation that came up on Twisted Sister and Savatage and a heavy-metal appeal to a diverse crowd whose common link was that they presumed themselves valiant losers in a world rife with unscrupulous winners. Pagans by label are no more prone to getting along than 1980s metalheads or contemporary atheists. But they are connected most tangibly by something they are not--e.g. part the mainstream--as opposed to something they actually are.