His definition isn't bad per se, but it really hinges on his own subjective worldview. Also terrorism isn't an ideology, a way of living or a faith, it's a way of fighting and imposing political change. One can't separate the cause and the method and the judge people merely through their methods. Despite the word "terrorist" being a synonymous for bad person, the concept really has no moral undertones by itself ("one man's terrorist... etc"). It really does boil down Netanyahu saying that he and Israel are good, moral and righteous, therefore anybody who opposes him and Israel are wrong. Really despite what they are doing. If Hamas were throwing flowers and slogans at IDF and settlers all this time they would have been just laughed off and genocide would have just continued, but more silently. If Hamas's method of fighting was to surgically destroy IDF and Israeli leadership, then he still would be bitching about it too as immoral and vile.
And I know I'm giving this rat too much credit here, when we all know he is a professional bullshitter hell bent on genocide to save himself. That is all one needs to really understand.