Они имели ввиду все-таки перевести Грозный. Значение ужасный для этого слова в английском появилось позднее. из википедии:
The English word terrible is usually used to translate the Russian word grozny (грозный) in Ivan's epithet, but this is a somewhat archaic translation. The Russian word grozny reflects the older English usage of terrible as in "inspiring fear or terror; dangerous; powerful" (i.e., similar to modern English terrifying or formidable). It does not convey the more modern connotations of English terrible such as "defective" or "evil".[10] According to Edward L. Keenan, Ivan the Terrible's image in popular culture as a tyrant came from politicised Western travel literature of the Renaissance era.[11] Anti-Russian propaganda during the Livonian War portrayed Ivan as a sadistic and oriental despot.[4] Vladimir Dal defines grozny specifically in archaic usage and as an epithet for tsars: "courageous, magnificent, magisterial and keeping enemies in fear, but people in obedience".[12] Other translations have also been suggested by modern scholars, including formidable,[13][14][15] as well as awe-inspiring.