good witch or bad witch?

There is no good or bad spellcaster. Though if you use certain magic and have Get Famous, they can probably get a bad reputation (sims don't like being set on fire probably) which can make them seem like a bad witch. Practical magic would probably do the opposite and help you get a good reputation.

I like it better this way as it gives my sim more opportunities to try and learn different magic without just being seen as bad.

I agree with MasonGamer, it's how your spellcaster uses the magic. Personally my spellcaster will be a little of both, hehe. :D

I'll definitely make good and evil spellcasters and those that are somewhere in the middle. Yes the game doesn't decide to make them either Glinda the Good Witch or the Wicked Witch of the West and woohoo I'm glad of that. You pick their traits and decide what you want them to be and how they will use their powers.

It depends on how the spells are used. For example, you can put out fires with with the same spell that mischievously freezes a sim. You could use a love spell between two single sims who you think would suit each other, or you could use it on enemies/their spouses to make them cheat on each other.

GF reputation system comes into play here, as others have said. If you don't have GF, then you would likely have to judge based on ratio of friends to enemies, or the intent behind actions (even if the results weren't as desired).

I'll want my evil witches to be seen publicly as good mostly.... I hope that's possible :)