Opinion on John Stuart Mill's Harm Principle

According to Mill, there is only one legitimate reason for the exercise of power over individuals:

"That the only purpose for which power can be rightfully exercised over any member of a civilised community, against his will, is to prevent harm to others."

http://en.wikipedia.org/wiki/On_Liberty

In response to John Stuart Mill's harm principle, I feel that the principle is only an ideal principle, just like communism which can never be applied in reality and only covers one form of wrongdoing. Whether a person has caused harm or not is not the only determinant in deciding whether one is guilty of a crime. Must one cause harm to have done wrong? Furthermore, what is the definition of “harm” in this principle? Does it only mean physical harm or injury? Or does it include psychological sufferings as well? Humans are emotional beings and psychological harm can cause greater damage than physical harm does. How and who will determine the degree of harm that one suffers? While physical harm is much easier to define, psychological harm is subjective to one's mindset. What one feels is harmful may be seen as harmless to another. Hence, the harm principle is not an appropriate guideline to determine whether one is punishable by law.

The harm principle does not cover the issue of moral values. Morally wrong acts may not be harmful to anyone, yet may result in serious consequences that should have it punishable by law. Theft is an act of crime, but may not cause harm to anyone. Racism too, may not neccesary cause harm, but it is definitely an act deserving punishment by the law, for it affects the unity of the multi-racial society of Singapore, where development is greatly dependant on this very harmony. Racism disrupts this harmony and affects the social peace and economy of the country. As seen from these examples, harmless acts may result in serious consequences to the society as a whole. Concluding the above statements, I feel that Mill's “harm principle” is insufficient alone as a guideline to determine whether one is punishable by the law, and it should also be decided based upon the individual situations and moral values as well.