The good / neutral / evil alignments can basically be broken down like so:
good = wants to help other people
neutral = self-serving, doesn’t really care about others
evil = wants to hurt other people
the lawful / neutral / chaotic alignments can basically be broken down like so:
lawful = obedient, respectful of authority, prefers tradition
neutral = respectful of authority within reason, neither obedient nor rebellious
chaotic = rebellious, has problems with authority, prefers new ideas
Loki is chaotic because he does what he wants, chooses his own path, has his own agenda, and doesn’t care much about anybody else’s rules or authority. He’s beholden to none, and his duty is foremost to himself. He has no interest in upholding laws, and as a god of change (among other things) he brings novelty (for good or ill) to sweep away traditional values and usher in new ways of thinking and being. This is true both of MCU Loki and the Norse deity.
MCU Loki is neutral (as opposed to evil) because he’s self-centered and not necessarily cruel or malicious. He’s willing to kill people to get what he wants, but he doesn’t derive pleasure from it. Every single time he kills someone in one of the films, he has a very practical reason for it. He tries to commit genocide not necessarily because he hates the Jotnar (he does – he has been conditioned to – and he sees them as inferior), but because he’s trying to prove himself worthy of the throne and capable of protecting Asgard from war. He attacks Earth with the intent not to destroy, but to rule. He kills Kurse out of vengeance. In the deleted scene he tries to kill the guard that Thor hadn’t knocked out because he doesn’t want the guard to raise the alarm and get him and Thor killed. Etc., Etc. Obviously I’m not saying that killing is good or that Loki was unequivocally justified; I’m saying that he always had reasons beyond malice and bloodlust, which is what makes him neutral as opposed to evil.
Easydamus.com gives this definition of a neutral person:
“People who are neutral with respect to good and evil have compunctions against killing the innocent but lack the commitment to make sacrifices to protect or help others. Neutral people are committed to others by personal relationships.”
Does he have compunctions against killing the innocent? Arguably yes: there are several moments in Avengers when Loki hesitates and Thor nearly convinces him to stop what he’s doing. He also states a desire to rule rather than destroy, which suggests that he would like to have someone to rule. Whether or not he has any compunctions against killing innocent people is open to interpretation, and I interpret him as having some. Obviously genocide is a strike against him, but a preemptive strike would have eliminated all chances of the war (which Thor started) escalating into something that would cost thousands of Asgardian lives. As someone raised in a society that viewed Frost Giants as monstrous, lesser beings, he would certainly have valued Asgardian life above Jotun life and made a decision based on that prejudice.
Does he lack the commitment to make sacrifices to protect others? Yes: If Loki were ‘good’ he would have let Thor convince him to call off his attack on Earth and dealt with the consequences from Thanos. If Loki were ‘evil’ he wouldn’t have hesitated, and would have been wholeheartedly committed to Thanos’ cause. As it is, Loki is neutral; he knows he’s not doing the ‘right’ thing, but self-preservation wins out in the end. As someone who has studied him for the past four years, I can also say with absolute certainty that he would never throw himself between a stranger and a bullet… but…
Is he committed to others by personal relationships? Absolutely: …Loki is very self-sacrificing when it comes to people he cares about, and familial bonds are extremely important to him. This is one of the trademark characteristics of a neutral person: they view their close friends and loved ones as extensions of themselves, and therefore any harm done to their friends or loved ones is harm done to them. A ‘good’ person sacrifices himself on behalf of the innocent; an ‘evil’ person doesn’t sacrifice himself for anyone; a ‘neutral’ person sacrifices himself for those who are closest to him because they are part of him.
This is complicated somewhat by the fact that Loki felt betrayed and lied to in Thor and Avengers; he was furious with Odin for not telling him about his heritage, projected a lot of his anger onto Thor (for being the favorite son), and was generally angry as hell. Odin severs all bonds with Loki in TDW ( telling him that his birthright is to die and that Odin would gladly have killed him if Frigga hadn’t put her foot down is sort of difficult to misunderstand ), so that familial loyalty no longer applies to Odin. But he continues to call Thor ‘brother’ and treats him as one ( they’re fighting, sure, but siblings can fight and hate each other and paradoxically still love each other ).
And don’t even get me started on Frigga. He snaps at her, yes, but in the end she’s his mother, and her death eviscerates him. He saves Thor from Kurse ( whether or not that’s incidental is open to interpretation ), but he’s willing to die to get revenge for his mother’s death. He couldn’t die to save her; dying in her name is the best alternative. An ‘evil’ character would never get himself killed on someone else’s behalf. Not for another person, not to avenge the loss of another person, not for anyone.
So… tl;dr, Loki is neutral because he is, above all else, selfish. He doesn’t hurt people just because he can or because he wants to, but he doesn’t actively help people either. People – those who aren’t close to him – are incidental. Sometimes they’re useful, sometimes they’re in his way, and he acts accordingly. He doesn’t hate people, he just doesn’t really care about them. His own personal freedoms are more important to him than the personal freedoms of anyone else. The exceptions are the people he cares about, because they are extensions of him; he’ll fight and die for the people he loves, but he won’t die for random innocents, and he won’t fight for higher ideals.