Since the origins are most likely prehistoric, /r/askanthropology or /r/asksocialscience might have some more knowledgeable folks on the subject.

In a rather widespread way, people typically regard the supernatural as something that is powerful, dangerous, and to be treated with respect. And all of this adds up to a generally fearful approach to the supernatural. We speak of "God-fearing Christians" in much the same way.

In the study of folk beliefs, folklorists do not find it necessary to find the root cause of the belief - although there has been some work along these lines. I prefer to simply consider the belief without trying to chase down any cause behind it.

Elisabeth Hartmann in her 1936 classic study of Scandinavian troll beliefs, spent a considerable amount of time considering the role of hallucinations in reinforcing beliefs. She never went so far as to suggest, however, that hallucinations caused the beliefs. See her Die Trollvorstellungen in den Sagen und Märchen der Skandinavischen Volker.

I corresponded with Dr. Hartmann (1912-2004) during the final five years of her life, and our lengthy letters discussed this very problem: I had translated her dissertation and wanted to present it in some form to a modern audience. Her mentor, Sven Liljeblad (1899-2000), was my mentor as well, so I had worked with him in the reading and interpretation of Hartmann's dissertation. I subsequently e-published a reworking of Hartmann's studies, augmenting it with new chapters and changing much of what she had written to suit a modern audience. One of the things I did was to omit entirely the chapters dealing with hallucination because this was the section which had the least relevance to modern folklore studies. See my work Trolls: From Scandinavia to Dam Dolls, Tolkien, and Harry Potter.