The Mongols
Genghis Khan, leader of the Mongolian Empire in the 13th century AD, united his people to eventually create the largest contiguous empire in human history. Defeating the will of the enemy was the top priority.
Before attacking a settlement, the Mongol generals demanded submission to the Khan, and threatened the initial villages with complete destruction if they refused to surrender. After winning the battle, the Mongol generals fulfilled their threats and massacred the survivors.
Examples include the destruction of the nations of Kiev and Khwarizm. Consequently, tales of the encroaching horde spread to the next villages and created an aura of insecurity that undermined the possibility of future resistance.
Subsequent nations were much more likely to surrender to the Mongols without fighting. Often this, as much as the Mongols' tactical prowess, secured quick Mongol victories.
Genghis Khan also employed tactics that made his numbers seem greater than they actually were. During night operations he ordered each soldier to light three torches at dusk to give the illusion of an overwhelming army and deceive and intimidate enemy scouts. He also sometimes had objects tied to the tails of his horses, so that riding on open and dry fields raised a cloud of dust that gave the enemy the impression of great numbers. His soldiers used arrows specially notched to whistle as they flew through the air, creating a terrifying noise.
The Mongols also employed other gruesome terror tactics to weaken the will to resist. One infamous incident occurred during Tamerlane's Indian campaign. Tamerlane, an heir to the Mongol martial tradition, built a pyramid of 90,000 human heads in front of the walls of Delhi, to convince them to surrender.
Other tactics included firing severed human heads from catapults into enemy lines and over city walls to frighten enemy soldiers and citizens and spread diseases in the closed confines of a besieged city. The results were thus not only psychological since in 1347, the Mongols under Janibeg catapulted corpses infected with plague into the trading city of Kaffa in Crimea, making it one of the first known uses of biological warfare.