Something or someone that is considered evil by you goes against the morals of your society. For example, if an Alien race publicly came down to Earth and attempted to kill us all (cliche, I know), you would consider those beings evil due to the fact that they are doing something that goes strictly against your societies morals. They, however, may find you evil as you don't actively go out to destroy other races for a battle of the fittest, as this goes against thier morals.
I personally think that God, or any other diety, has nothing to do with it.
As to your more recent question: Man inflicts pain on man for a number of different reasons. It also depends on thier morals. For example, some people will happily kill to get more power for them or thier country. This isn't against thier morals, so they see nothing wrong with it.
Another common reason is that for a lot of people (who know pain and suffering themselves) can take it out on others. This fulfills some inner need of being better about themselves.
Otherwise known as'The vicious cycle of Suffering'.
Peraldon.
