How can I kill adorable animals?

Solution 1:

Update:

As of 1.1, bunnies are just like any other mob. You may dismember them in whatever grisly fashion you choose, any place, anywhere, any time.

Begin Original Answer:

You cannot interact with Bunnies or Goldfish because the game treats them like NPC's. Therefore, you have two options for evil, wholesale slaughter!

• Lure an enemy into the bunnies!

Slimes are everywhere aboveground during the day, and zombies are relentless at night. Though they will not seek out and destroy these fluffy friends, if you put yourself on the far side of one of the helpless NPCs, they will quickly decapitate them if they jump into the rabbits, or if the rabbits jump into them (in an impressive disregard for the laws of physics, I might add!)

Enemies may be 'coaxed' into following you by hitting them with a weak weapon, such as a wooden arrow shot from a wooden bow.

If you hear the "splotch" sound of something dying, or see numbers pop up on an otherwise dark part of your screen, it means that an enemy found its way into a critter on it's own. (If underwater, be sure to loot the dropped goldfish!)

There is one aspect of bunnies that may make this difficult, however; Bunnies only spawn in the 1/3 of the world nearest your spawn -- it is not inconceivable that the reduction in monster spawns (from your moved-in NPCs) makes it harder (if not downright impossible) to find a fiend to sick on your fuzzy hopper in the first place. If this is the case, perhaps you would prefer to...

• Use Lava!

If dwarf fortress has taught me anything, it's that magma solves everything. Bring some magma to the surface, and any hapless NPC who walks into where you "accidentally" spilled it will be in a world of hurt. (Try this trick on the Clothier too!)

Finally, you can use Vile Powder to transform bunnies and goldfish into corrupt versions of their former selves. These incarnations can be slaughtered mercilessly as long as you like (or have corrupt animals to slaughter).

Don't forget your evil laugh; remember -- you can't spell slaughter without 'laughter'!

Solution 2:

As of version 1.1, you can freely slaughter adorable animals to your heart's content! Bunnies, birds, and goldfish are killable just like other hostile NPCs.

There are no notes that I can find regarding this change documented in the 1.1 Patch Notes, so this may possibly be a bug. Until it's fixed, feel free to murder at will!