It's a tough question that will be up for debate for as long as historians chew on the topic. The following is an excerpt from a draft Introduction to Folklore, the core of which is based on the work of my mentor, Sven Liljeblad (1899-2000) and his Introduction, self published in 1966 for his students. His simple thesis, regarding the transformation of agricultural economy, is eclipsed by the considerable scholarship that has been spent on the question you raise here. And I have attempted to construct a frame that reflects this growing, complex image of the period. Here is the excerpt:

Throughout European history, there have been examples of people who specialized in the use of the magical arts. In general, these people followed the craft for the benefit of others within a village. Anti-social witchcraft is rare in historical records, and those practicing magic to the benefit of the community were often highly regarded.

During the medieval period, witches continued to practice their craft, but the Church steadily escalated its interest in and opposition to their activities. Still, the idea that witches were evil did not become widespread until the fifteenth century. Several factors caused this change, not the least of which was the Church’s attempt to root out pagan survivals. Not surprisingly, the Church classified holdovers of the old religion as evil, a concept that European peasants were slow to grasp.

A general crisis occurred in peasant society during the late medieval period as pressure from the aristocracy and the land-holding Church caused a shift away from dairy culture to farms producing grains. Well into prehistory, European peasants regarded cattle as a source of wealth. The English word “fee” comes from the Anglo-Saxon word for cattle. The same is true for the Latin root of “pecuniary.” The problem with a cattle, dairy culture, however, is that it is extremely difficult to tax. Grain production allows for the amassing of agricultural wealth, and so the Church and the aristocracy increasingly forced peasants to grow more grains at the expense of their pastures and cattle.

European peasants consequently faced a shrinking pool of wealth. Put more plainly, their herds were dwindling. At the same time, the Church was condemning magical practices as a result of perceived pacts with the devil. Peasants, increasingly anxious about declining wealth, began to look for practitioners of magic as the evil source of their economic demise. Although there are earlier examples of trials, reputed witches found themselves condemned in larger numbers beginning in the 1480s.

Of course, many historians have considered the question of what caused the witch craze, and in the process, they have identified many factors that certainly contributed to the hysteria. Finding a cause for the witch craze is a complex problem, and it is probably better to discuss multiple, complementary causes and influences. Regardless of the origin of this phenomena, the primary documents associated with the prosecution of witches provides an opportunity to peer into late medieval folklore.

The election of Pope Innocent VIII in 1484 added another dimension to the situation when he issued a formal statement against witchcraft. He further commissioned Heinrich Kramer (ca. 1430-1505) to research and write a book documenting the perceived epidemic of witchcraft. The author included the respected name of Jakob Sprenger (ca. 1436-1495) as a co-author of the resulting publication, but the extent of the learned academic’s participation in the project is not clear. The resulting Malleus Maleficarum (The Witches’ Hammer) appeared in 1487. Because its publication occurred shortly after the invention of the Gutenberg Press, the book received wide dissemination, and it became a sensation, appearing in twenty-nine printings by 1669.

The Malleus Maleficarum remains one of the most useful documents portraying medieval beliefs in the subject. But because of its popularity, the document not only documented current folk belief, but it also influenced it. This was the period of the great witch trials. Although Papal authority started the witch craze, it became severe in Protestant countries where economic transitions and resulting strains were common. Thus, almost no witches were executed in Ireland or Italy, and it was relatively rare in France. Most victims lived in Germany, the Scandinavian Countries, and Britain.