Deadly monsters, haunting spirits, and supernatural entities that are beyond human to even describe with words, are but a few examples of what makes horror an appealing genre to many. There are definitely great examples of works of horror that can be considered true masterpieces in its genre, however it is certainly one of the easiest genres to not succeed in garnering true terror within its framework. Especially with anime, where there are only a handful of noteworthy horror shows and the rest only come up with predictable scares and horror tropes being used way too much. Mononoke fits, unfortunately, to the latter; but only by a very slim margin.
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