A resposta curta, citada da Wikipedia, é a seguinte
Spaghetti Western, also known as Italian Western, is a broad sub-genre of Western films that emerged in the mid-1960s in the wake of Sergio Leone's film-making style and international box-office success. The term was used by critics in USA and other countries because most of these Westerns were produced and directed by Italians. According to actor Aldo Sambrell, the phrase 'Spaghetti Western' was coined by Italian journalist Alfonso Sancha. In the beginning the term was used in a derogatory sense, but over time it has become accepted as descriptive.
The typical Spaghetti Western team was made up of an Italian director, Italo-Spanish technical staff, and a cast of Italian, Spanish, German and American actors, sometimes a fading Hollywood star and sometimes a rising one like the young Clint Eastwood in three of Sergio Leone's films.
Se você gostaria de ler mais sobre isso, a FlavorWire publicou um artigo chamado 'Guia para iniciantes para Spaghetti Westerns '.
Então, o que torna um "Western" um "Spaghetti Western"?
Existe um artigo em spaghetti-western.net que faz um bom trabalho ao descrever o diferenças, mas, para resumir; Os westerns de espaguete são mais violentos, orientados para a ação e escassos no diálogo, e o "herói" é mais frequentemente do que não apenas menos mal do que o resto.