The quote from Gifford also provides possibly the earliest occurrence of the phrase "good Witch" in any surviving written source in the English language (or at least it is the earliest I have tracked down so far). Before this, the word "Witch" is often encountered in written sources as a term used, without any qualifications such as the adjectives "good" or "white", to refer to those who perform acts of beneficial magic, such as healing and divination. In fact, the two excerpts from Henry Holland's Treatise on Witchcraft clearly demonstrate that this usage of "Witch", alone and unmodified, to refer to healers, diviners, etc, was still in use in 1590.
Perhaps it was the case that only once the more intense period of the Witch Hunts was getting under way (in the mid to late 16th century) was it thought necessary to begin distinguishing between two kinds of Witches: the good and the bad.
Both Gifford and Holland make it clear that they do not themselves believe that those who are referred to as "good Witches" are in fact "good." To be sure, Gifford and Holland would never themselves make use of the term "good Witch" for any reason other than to criticize the popular custom of using that phrase, and to "correct" the uneducated masses, who were accustomed to seeking out Witches for magical assistance ranging from healing to divination to recovering lost or stolen objects to matters of love and romance to acquiring wealth, etc.
A valuable source of information on Gifford and Holland and their views on beneficial magic and Witchcraft is a paper by Stuart Clark and P.T.J. Morgan that actually focuses on Holland's older brother, Robert: "Religion and Magic in Elizabethan Wales: Robert Holland's Dialogue on Witchcraft", Journal of Ecclesiastical History, Vol. 27, No. 1, Jan. 1976. There is also an excellent recent (2004) biography of Gifford by Timothy Scott Mcginnis: George Gifford And The Reformation Of The Common Sort:Puritan Priorities In Elizabethan Religious Life.
George Gifford (c.1548-1600)
A Discourse of the subtill Practises of Devills by Witches and Sorcerers.
By G. Gyfford. Imprinted at London for Toby Cooke. 1587.
"But if a man or child be sick, they run unto a witch, they hate not ye joyning in compact with devils, when as they runne for help unto them: they have somewhat lost or stole: they do by and by fly unto devils: they make account that those be good witches and do no harme."
Henry Holland (1556-1603)
A Treatise Against Witchcraft (1590)
http://faculty.history.wisc.edu/sommerville/367/hollandtreatise.htm (excerpts, not full text)
Mysodemon. I would gladly be resolved in another doubt, Theophilus: Most men are wont to seek after these wise men and cunning women, such as they call witches, in sickness, in losses and in all extremities. What think you of this, Theophilus?
Theophilus. I am assured, Mysodemon, that such miserable people commit a most horrible and dreadful sin, that they are justly brought into Satan's snares for the contempt of God and his word, that they seek help of the same serpent that stung them, that against the known principle of the Gospel they would have Satan to drive out Satan. And, to be short, that they are in very truth but mere Gentiles and pagans in religion, blind in their minds, hardened in their hearts, strangers from the life of God and that - if God give them not speedy repentance - they will become past feeling by custom and continuance in their sins . . . .
Mysodemon. But some understand the Law of God, Theophilus, as the Emperor's Civil Law expoundeth it. Eorum est scientia punienda, &c. qui magicis artibus contra salutem hominum &c. nullius vero criminibus implicanda sunt remedia humanis quaesita corporibus [Punishable knowledge is of those magical arts against human welfare - remedies for human bodies are not at all criminal]. Hereby it is manifest that hurtful magicians and witches which kill and hurt men's bodies and goods are only to be avoided, and so they do amongst us. But such of these practitioners as can and will cure the sick, find things lost, have a good near guess in predictions, are not in any wise to be blamed, saith this Law. And therefore these are often sought after in necessities unto this day, and they seem to do no man harm but much good, and they speak the truth very often, and men will do much, Theophilus, in extremities.
Theophilus. First for that Law, it is a most wicked and profane law, and if it be one of Constantine's constitutions, it was published no doubt before his conversion to the faith. And as for the good that miserable receive of the sorcerers, assure thyself, Mysodemon, the more they seem to benefit men's bodies, the more harm they do both soul and body.