QUESTION: Is Buddhism a religion or a psychology?
SHORT ANSWER: Both and more, but religion firstly.
LONG ANSWER: Buddhism is first and foremost a religion, and as such it has given rise to culture and civilisation, including systems of education, psychology, community building, politics, arts, literature, poetry, and so on. If Buddhism were not a religion then it is rather unlikely that it would still be in existence today, or that it would have come into existence in the first place. One would not go through what Siddhartha went through simply for the sake of an academic or professional discipline.
Similarly, Dr. Ambedkar was the leader of the untouchables in India. He saw that the caste system was (and is) deeply embedded in Indian society. He tried to get rid of it through politics and failed. In the end he decided that only a change of religion would be sufficiently fundamental to bring caste to an end so he converted to Buddhism. Religion is most fundamental. People dedicate their whole being for religion and that vis what Buddhism takes. You can take it as only a psychology, or only an education, or only a culture, but you will not get the heart of it that way.
Buddhism has come to the West through a variety of channels, but it is often appreciated here for its psychological aspect. Of course, we also appreciate its arts and its influence for peace in the world and other fruits that it has borne. However, none of these would exist if it were not fundamentally a religion because only a religion leads people to dedicate their whole lives in the way that Buddhist monks, nuns and priests do. They are not just doing a job. Thinking of Buddhism as psychology may well help a Western person to understand some important aspects of it. It can be a way in, but that way goes a lot further if one is willing to follow it all the way.
Modernism has given us much, but it also has some pernicious aspects. One of these is its tendency to fragment and then asset strip. It tends to plunder rather than deeply appreciate the culture it encounters and turn their fruits into consumer goods. People who are only casually interested may well appreciate Buddhist art or may well benefit from the latest meditation exercise without having to make any serious commitment of their life, but if nobody makes such commitment then the wonderful fruits of Buddhism will soon not be there for the picking because the root and trunk of the tree will be dead.
In my own life, Buddhism has always been firstly a religion. I became a social worker in order to practise ‘right livelihood’ because I was Buddhist. I got involved in various forms of social action for similar reasons. That led me into psychotherapy and, naturally, I wanted to apply my Buddhist principles in my work. That led me to write books about Buddhist psychology. Foremost, however, I am Buddhist and that is what I teach and advocate and that is what has provided the inspiration for all my most important work. Namo Buddhaya. Namo Dharmaya. Namo Sanghaya.