As commonly used, "Psychology" refers to a highly postulated, culturally determined approach to human nature that assumes all behaviour is explainable through language-based analysis. If only it were that easy! When applied to our domain, the theatrical, the result is a limited, rather barren artistic paradigm. Welcome to the twentieth century. And goodbye.
One of the most devastating comments Jacques Lecoq could give was "C'est trop psychologique!" Carlo Mazzone-Clementi used to leap about shouting "No justice, no psychology! No justice, no psychology!"
What did they mean? In Carlo's case he was primarily referring to the ways in which self-censoring and analysis destroyed spontaneity and creativity. They are of course useful tools for the mature actor, the actor who is able to keep them away from the actual act of acting! But in an educational process they need to be introduced at a later stage when the student has developed a deep and reliable familiarity with the musicality and spontaneity of her instrument; when she knows how and when to let the I-myself hand (un)control over to the Me-myself.
In Jacques' case it usually referred to an absence of play, an impoverished sense of style, and a shrunken sense of theatrical space.