What is the difference between words "psyched" and "thrilled"?

In normal usage, I think that the adjectives 'thrilled' and 'psyched' are often interchangeable: they describe someone in a state or feeling of excitement. (See here for 'psyched' and here for 'thrilled'.)

One difference in meaning is that 'psyched' implies anticipation and is forward looking (you're often "psyched for something" that will happen later) while 'thrilled' doesn't have to be forward looking (you're often "thrilled with something" that's already happening). That said, you can use 'thrilled' of the future. E.g., "I'm thrilled to be seeing the new movie tomorrow" or, as in your example, "The children are thrilled to go to the circus tomorrow".

The main difference between the two seems to me to be when you would use them. 'psyched' is a colloquial word. I wouldn't use it normally in formal writing. 'thrilled' on the other hand is neutral. You can use it in conversation or writing of all kinds.

Psych

to make (yourself or another person) mentally ready to perform or compete or mentally prepare (someone) for a testing task or occasion.

Now, when a task or occasion is demanding, we tend to be nervous, and due to this nervousness, psych is often used in an anxious or nervous sense.

Thrill

to cause (someone) to feel very excited or happy

to feel very excited or happy about something

I think the difference is pretty obvious. Psyched doesn't mean you're thrilled and thrilled doesn't mean you're psyched.

"The children are psyched" means the children are prepared to do something. "The children are thrilled " means the children are excited or happy about something.

Examples : He is psyched for the exam,not thrilled. He is thrilled about the relationship, not psyched.