@Venom: Mostly because she has a parasite in her brain that lies dormant unless two things happen:
1. She leaves Hinamizawa and the influence of the Queen Infected.
2. She's put under extreme stress/anger/depression.
The second one happened.
The parasite will slowly make people more paranoid and unstable until they start hallucinating both auditoraly and visually. Then they become Homicidal. Shion lost her boyfriend, who she loved, to the parasite. (No one knows about the parasite. To them, the killings are a curse. Everyone in Hinamizawa has it) So, she started making connections to her boyriend's disappearance and killed them all off. Satoko just happened to be Satoshi's little sister. Oh, and the girl in the cage was Shion's sister, Mion, whom she was makin watch all the torturings.
(Shut it. I meant Boyfriend. I'm tired right now)