Pumpkinhead (1988), directed by Stan Winston.
When his little boy is accidentally killed by vacationing city kids, the father visits a witch-woman deep in the woods, so old she looks undead. By paying the ultimate price he can have vengeance. Too late he finds it's not what he wanted.
This is one of my favorite creature-features. Understand: this is not exactly a high art form.
You can see problems with the production:
The city folk are the usual anonymous mix of snotty and nice.
Cute kid with big glasses, cute dog, doting father.
Plenty of night-time blue light.
The country folks talk kind of Appalachian but this is obviously California. (I suppose the Golden State can have migrants with undying witch-women, too).
The solution to the creature derives from the "moral little tale" nature of the plot, which is a bit too neat.
...but its good features remain:
A tragic horror film, powered by grief.
The moral little tale is a good one: vengeance takes you to Hell.
The backstory, unexplained but hinting at nightmarish reality. Sensible people lock the door and don't look out the window.
The creature has a wicked sense of humor, smirking as it goes about its business.
Lance Henriksen fan club. (He has fake front teeth, said he needed them to get into the role).
Available on Shout Factory Blu-ray with a gang commentary track and many extras, all copied from the earlier DVD, I believe.