The wikipedia page for strategic bombing is where I pulled that Churchill quote from. When strategic bombing specifically targets a civilian population with the intent to cause terror, by Churchill's own account, that is terrorism (the term 'terror bombing' has been used by historians and commentators to describe the practice, and I think it fits.) Both sides of WW2 used terrorism extensively. They normalized it, but normalized terrorism is still terrorism.

"bombing of German cities simply for the sake of increasing the terror, though under other pretexts"