Okay first, just, wow, all of y'all's comments have been super interesting and super helpful (they've definitely made me think). And I hope this discussion isn't done yet because I literally love character development, especially when it's to create a good villain  . Also, I've been to respond to you guys for a few days now and just kept not having time
Minstrelgirl451 wrote: One thing that really helped me flesh out my "villain" (And even though I'm classing him as the antagonist, the true conflict will be between my MC and himself) was doing a character interview between him and a friend's character. Basically, we stuck them both in a room with a list of questions (courtesy of K.M. Weiland's Outlining Your Novel Workbook), with the characters only understanding that they were told to meet and exchange information. ... I think one thing that can make a villain scary (at least for me) is if they are relatable - suddenly I realize that it isn't that difficult to descend into villain-hood. I would be happy to share what I have come up with, how I searched out his backstory, and how my protagonist's journey actually ends up mirroring the villain's in several ways - which was actually the scariest thing for me, since I am fairly similar to my protagonist...  )
My sister actually has that book, I think! I'll have to look at it.
That's a really good point, because I totally agree! When a villain makes you realize it's easy to be a villain, it can be more terrifying than pure evil, although, like you said, there is a place for just completely evil and insane villains, as well. But I would definitely love for you to share that!
Lt. General Hansen wrote: I think the answer to this question depends on two major factors of your story:
1) What role does your villain play in the plot? and
2) What is your MC afraid of?
Regarding question #1, to make your villain a threat, you have to know what function he's playing in the plot. For example, in most horror movies, the villain is there to be scary and be a threat to the MC's life. He's something to run from, and that's usually his only function. Therefore, an average horror movie villain becomes terrifying by how many people he kills, how twisted his methods are, etc. The franchise ALIEN is a good example; the aliens are scary because they can kill you, and that's basically as deep as that goes.
Regarding Thanos and most superhero/fantasy epic villains, however, the villain is feared more because of what he intends to do to the world. Sure, your MC wants to avoid a one-on-one with Thanos because they will probably lose, but the real threat is not to the MC himself. The real threat is what Thanos plans to do to the world. The MC's goal is to stop a world domination (or decimation) plot. Sometimes it also becomes a philosophical threat--how appealing is the bad guy's argument? Dark side vs. light side, etc.
In other stories, the MC's main battle may be with himself, his personality, his weaknesses, his inner fears, etc., like Minstrelgirl mentioned. In other cases, society may be the biggest threat. Most dystopian books are good examples of this. President Snow was not, ultimately the main antagonist of The Hunger Games. He was a viable threat, but the real danger came from the games themselves and the constant betrayal and fight for survival.
The reason I say this is because your villain's role determines what makes him threatening. President Snow wouldn't have been more threatening if you'd given him a chainsaw and had him go all "Halloween" on people. In fact, President Snow was at his most threatening when he seemed most kind. His involvement in Katniss's victory tour and "wedding" was far more terrifying than any actual killing that went on in the arena, because that was were his true power lied: to control, to manipulate the narrative, to force Katniss to serve his purposes even when she was a "victor." Similarly, once you know what function your villain needs to serve--which includes understanding the tropes of your genre--you can know what will make your villain a real threat and not just a show of blood and gore.
Similarly, it's important to understand what your MC is afraid of, because your villain should be a counterpoint to that. This doesn't just mean that if your MC is afraid of bats your villain should be a bat, although you can include elements of that. What this means is that, whatever the core of your MC's struggle is, whatever lesson you want him to learn, your villain should be designed to force your MC to contend with that area of himself.
Ok wow I was trying to shorten this for sake of keeping my response from being to long, but I couldn't really because it's all so good!
Both of those question are definitely really good things to ask when creating a villain, and I think I'll have to look at my stories and ask those questions when re-examining my villains.
Also, you're totally right about considering circumstance with your villain, and how it's not always just the villain that causes the conflict and the problems. And I 100% agree that Snow was most terrifying when being kind, because you knew he was planning something.
And that is completely true! I think I sometimes forget that villain are for the MC as much as for the plot, and they don't just need to stop the MC's plans and such; villains should also force the MC to confront fears and struggles and things they would rather ignore.
Domici wrote: ... For both I sat down and did the Goal, Motivation, and Conflicts ( viewtopic.php?f=220&t=9740&hilit=motivation&start=200#p206039) and make them likeable. Hide the bad and let the reader see that the villain's decisions actually make sense. One of the notes in "Writing Monsters" talks about making the monster unknown. The less the characters, and even the reader, knows the more terrifying it can be.
I will definitely use that! I've always wanted to try to hide the villain's bad and make their decision make sense to readers, but struggled with it.
And I totally agree! The unknown is often scarier than the known.
Varon wrote: Another thing to keep in mind with compelling villains is that really, really good ones mirror the hero to the extent that they could be the same person. One bad event might be all it takes to make the difference between a hero and a villain.
There's some incredibly interesting psychoanalysis of the relationship between Batman and the Joker, for example. Or Luke Skywalker and Darth Vader. They are incredibly similar and if you can bring this connection to the forefront, then regardless of the conflict, it becomes something incredibly personal.
The hero's conflict might be against a villain, society, or whatever, but the true conflict will be to preserve their identity. That's what makes the Joker such a terrifying villain. He has no real goals, except to push Batman to the breaking point and bring Bruce Wayne down to the Joker's level, and he will go to any length to accomplish. He doesn't want money, he doesn't want power. What do you do against someone like that? That's what Batman is wrestling with in The Dark Knight.
So if there's a way to create a strong parallel and connection between your hero and villain, that's a really great way to start.
Ok wow this is literally one of my goals in a spy book I'm working on! So much so that, were it to ever be published, I want the cover to be the MC looking in a mirror and the reflection being the villain's face. But I couldn't agree more; making a villain and a hero similar to each other can be terrifying as a reader because there's the fear of "what if the hero were to become this?"
Once again thanks for all the tips so far, and I will take literally any and all advice anyone can give on this subject. And sorry for how long this turned out to be; I got behind in answering when responses were first posted 
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