'Witchcraft' is a term which covers a wide area and can mean many things, not unlike the term 'psychic'.
The main difference between the two is the context in which they are used:
Witchcraft is something witches did, in a world ruled by simple-minded religion on one hand and a vast amount of superstition on the other. Today, our world is most influenced by scientific progress, and this is the context in which the term 'psychic' is used.
Both psychic understanding and witchcraft attempt to describe and influence the spiritual realm with words, concepts and ideas which are most abundant around us.
On the more practical side, modern witchcraft generally relies more on rituals, spells, spirits of nature, and cosmic laws, whereas the psychic path focuses on the psychic's mind and consciousness - and goes forth from there.
Psychic witchcraft is a pragmatic approach: use whichever method is suitable to you to enhance your understanding and achieve your goals.