Refers to mental or psychological aspects, often in contrast to physical (身体的). The gloss 'physical' is likely an error or a rare usage; the primary meaning is mental/psychological.
Mental stress can sometimes affect your physical condition.
He seems to have psychological issues.
conscientious; honest; fair
central; main; core
antipodal
crucial; critical; vital; core
ambitious; enterprising
psychological trauma; psychic trauma
mental state; psychological state
mental representation
self-centered; egoistic; selfish
post-traumatic stress disorder; PTSD
From 心 (heart, mind) + 的 (-like, -al). The exact historical derivation is uncertain, but the kanji compound follows a standard pattern for forming adjectival nouns.