In every sense, pagan is a fighting word. To search out its origins we have to delve into Roman military slang. In Latin, one meaning of the word pagus was that of a country district or a rural area. From this came paganus , a country dweller or villager, the opposite of urbanus , someone who lived in a town. Then as now, many townspeople felt themselves superior to those from the countryside, which is why the latter has spawned urbane but why pagus has given us peasant , by way of the French pays and paisant . For the urban Roman, paganus had much the same undertones as peasant has for us now.
Roman soldiers, who called themselves miles , used paganus as a belittling slangy term for somebody not in the army, a civilian. The early Christians in Rome thought of themselves as soldiers of Christ, taking seriously St Paul's instruction to put on the whole armour of God. They adopted the same vocabulary as Roman soldiers— miles for one of their number and paganus for a person who wasn't a Christian.
Pagan isn't just a fighting word, it's also a slippery one, at least to judge from the attempts of various dictionaries to get across what it means.
Oxford dictionaries have variations on “a person not subscribing to any of the main religions of the world”, which leaves open the question of what is a main religion, who decides what is or isn't one, and whether those not subscribing to any of them have a say in the matter. Chambers Dictionary defines the word as referring to someone who has pre-Christian beliefs, especially ones involving worship of more than one god. This neatly reinterprets the word for our modern and sensitive, PC generation, albeit ignoring about a millennium of usage.
Others attempt multiple definitions that often include something like “a heathen; a barbarous or unenlightened person”. Heathen is a Germanic word that means exactly the same as pagan , since it originally referred to a person who lived on a heath, a upcountry and wild bit of land, and so was uncultured or savage. It took on its religious sense in imitation of pagan . Using it to define pagan is a circularity that inquiring minds can do without.
Other dictionaries try meanings for pagan such as “a person who has no religion or disregards Christian beliefs”, or “someone who has little or no religion and who delights in sensual pleasures and material goods; an irreligious or hedonistic person”.