So, what is the Psychic-type?
Psychic-type is a representation of the psychokinesis, the alleged ability of the mind to interact with objects in the real world. This idea was initially started in early 20th century and the earlier look in human mind with earlier forms of psychology. It was popularized in 50s to 70s in popular culture through science fiction novels and alleged psychics and espers who were largely showmen mimicking stage wizards. These ideas have entered role playing games through science fiction rpgs, but also through Dungeons and Dragons, which had psionics since its first release.
This idea was not popularized in JRPGs until psychics became famous again through TV, which lead to the PSI mythos of Mother series, which became the backbone of other JRPG series that wanted to include psychic abilities, with Pokémon, a direct descendant of the Mother series, basically copying the entire concept. Later franchises have also followed suit, as they became more entrenched in less high fantasy and more urban myths.
Within Pokémon's urban fantasy setting, Psychic was used for three primary reasons. First was as the strongest type in the game, as a homage to Mother. The second was as a representation of stage magic, as a homage to association of stage magicians and alleged psychics. The third was as a representation of extraterrestrial life, as many science fiction series gave aliens and other technologically improved species like futuristic humans psychic abilities, which is what Mother series was all about. As time passed, Psychic became less of a dedicated magic type for the series, and more of a collection of ideas, generally working in tricks and traps.
The History of the Psychic-type:
In the original games, Psychic-type was an absolute monster. Immune to Ghost, weak to only pathetic Bug, resistant to some powerful types like Fighting, there wasn't anything to stop Psychics from reigning. Not only they had some of the best Special stat, they also had great coverage, good stat buffs, and relative accessibility. Though Dragon was originally created for the end-game role, much like other end-game elements in other JRPGs it was intentionally made weak. Psychic, however, got scot free. This caused all fully evolved Psychic-types besides Mr. Mime and Hypno to join in OU of Red and Blue.
The moves granted for Psychic-types became staples of the type. Psychic remains the strongest common Psychic-types move, Dual Screens retain their utility purpose, so does Hypnosis, Agility, Barrier and Amnesia. Rest has a variety of strategies to abuse and Dream Eater is relatively useful in-game. The only not-so good moves are Teleport and Meditate and the early game stuff.
Next generation however single-handedly ended Psychic's reign of terror. Two types were introduced for the explicit purpose of nerfing Psychic-type, Steel and Dark, and a powerful Bug-type in the form of Heracross was created. Nonetheless, some of the old Psychic-types retained their usefulness in other areas, with new Eeveelution Espeon being fairly decent. But the biggest harm done to Psychic-types was the Special split. Not only this drastically nerfed Amnesia, one of the most notorious moves from previous generation, it also significantly weakened Psychic-type, turning it from an elite type to a common type. This was largely due to the fact that Psychic-types did not retain their gigantic Special stat, but it was either given to Special Attack or Special Defense, with the substitute stat being significantly weaker, save for Mr. Mime , Jynx and Slowbro. The newly introduced Psychic-types were also notoriously weak, giving Psychic-type the stigma of a gimmick type for several generations to come.
Only two major moves were granted for Psychic-type. One was Mirror Coat, a relatively decent Counter counterpart, and Future Sight, a type indifferent multi-turn move that was buffed several times over in the recent generations to make it at least somewhat usable.
The third generation was a mixed bad for Psychic-types. Though Psychic-type gained one pseudo-legendary, several real legendaries, and two 500+ BST species it did not avoid being largely gimmicky. This was extremely blatant in the only Psychic-type Gym Leader in the game, Tate and Liza, who were also the seventh Gym Leaders. They used the second weakest Psychic-types in the game, Lunatone and Solrock. Several of the Gen II Psychic-types also reappeared in Hoenn, with Wobbuffet getting a pre-evolution due to its initial rarity.
New moves were largely gimmicky, but this generation introduced Calm Mind, one of the better stat raising moves for Psychic-types, and Cosmic Power, a lesser distributed defensive stat raiser. Trick was also introduced in this generation. Biggest improvement to Psychic-type however was its association with Space related phenomena in this generation, with species like Lunatone, Solrock, Jirachi, and to lesser extent Baltoy-line. In terms of Abilities, Psychic-types were primarily given Synchronize, with some getting Levitate and others getting Inner Focus.
Special-physical split was largely a loss for Psychic-type. Not only Ghost, Dark and Bug-types became stronger, Psychic also lost its association with Elemental Punches, which were now all Physical. To compensate for that Psychic-type was given association with Energy Ball, a Grass-type Flash Cannon clone that was upgraded into a Psychic clone. New Physical Psychic-type moves were also notably weak, Psycho Cut and Zen Headbutt were relatively unreliable moves. However, this generation introduced some notorious moves like Gravity, Psycho Shift and the ever-popular Trick Room, a move that single-handedly defined a generation.
In terms of new abilities, Psychic gained Forewarn, but that was largely useless.
Gen 5 was the start of a slow rebuild for Psychic-type. The vast majority of Psychic-types introduced this generation had 480+ BST, evolved, and had decently good stats and abilities. While there wasn't anything as powerful as a Metagross or Gardevoir, new Psychic-types did their job admirably. New moves introduced were largely hit and miss, but some notable ones like Stored Power and Psyshock were introduced, with Trick Room getting two other lesser powerful counterparts.
In terms of new abilities Psychic-type gained Magic Bounce, Telepathy and Magic Guard was introduced to Psychic-types.
Gen 6 continued on the slow rebuild. While only Alakazam was buffed, rest of the Psychic-types gained decently powerful Mega Evolutions. Fairy's introduction was also hit and miss. While Fairies competed with Psychics against Fighting-types, many Psychic-types gained Fairy-type moves as coverage and vice versa, and several Psychic-types were buffed with the addition of Fairy-type to their typing. There was only one new move, Hyperspace Hole, a move exclusive to Hoopa Confined. However, Psychic gained a new ability, Competitive, which served as Special version of Defiant.
Gen 7 was another hit and miss generation for Psychic-types. The majority of non-legendary Psychics were only slightly more powerful than their previous counterparts, and many of them did not have new Abilities. Though Psychic-type finally gained its own area effect move, Psychic Terrain, it remained poorly distributed. Other moves like Psychic Fangs, Instruct, Speed Swap, while decent, also suffered poor distribution. Nonetheless, Lunala and Solrock turned out to be more powerful than expected, and Tapu Lele remains one of the most annoying Pokémon to face against.
The Overview of Psychic-types:
Before creation of Fairy-types, Psychic type was the dedicated "magic and myth" type, which meant that bulk of the Legendaries in Pokémon would either get Psychic-type, or some association with the type. This caused Psychic-type to gain a massive momentum that allowed it to increase its BST averages. In addition, the early Psychic-types were often three staged, in allusion to Abra, which allowed Psychic to contain its large BST and stats.
Not everything is sunshine and roses though. Most generations introduce secondary or primary early Psychic-types that are two staged and around 460-480 range, which is pretty bad. Also, all generations tend to have one or two gimmicky Psychic-types, which often reappear in other generations to fill in their regional dexes. This causes Psychic-type to often struggle between two extremes.
Psychic-type also lacks powerful moves other elemental types have, despite being often treated as a primary elemental type, in terms of moves and abilities it is really closer to other paranormal types. However, Psychic's early association with magic and trickery has allowed it to become the second largest type move-wise, as it has one of the largest repertoire of status moves, some of which like Rest being universal moves.
While Psychic remains a shadow of what it once was, it is still a decent type with good Pokémon, but it is not an easy to use type and will likely continue to be irrelevant in the larger scheme of things.