There are a few pre-christian uses of ‘paganus’, usually used to mean the person was closely tied to the local customs of the place he or she was from. Pre-christian religion often was very locally focused — it was the divine presence in one’s home that made it one’s home, and worship through local customs was the same as loyalty to one’s home. So ‘pagani’ was sometimes used to mean ‘devoted to the local ways’, in a complementary sense. It often also meant ‘hick’ in the sense of being local or rural, not cosmopolitan.

Christians took up the meaning of “loyal to the old ways” — as did Roman vernacular — as christianity became more popular in the empire. By the 3rd or 4th century, ‘Pagan’ was used in the western empire, and ‘Hellene’ was commonly used in the eastern empire — both used to refer to those who held to the pre-christian religions. Not much later, it was pressed into use in a derogatory sense.

Christian scripture plainly refers to the worship of the Old Gods as demon-worship. The roman culture had many old tales about dangerous night-time cults that became welded to memories of the public rites of the Old Ways. On the other hand, the older religions really _had_ been full of divination and magical arts, which were then considered science, but which were forbidden by the new Christian church as it gained authority.

‘Pagan’ has been a term for traditional pre-christian religion pretty much from the earliest uses we can find.