Until recently, Deconica was generally considered to be synonymous with Psilocybe, and was originally named as a subgenus of Agaricus by Worthington George Smith in 1870. It was later raised to generic level by Petter Karsten in 1879. However, several molecular studies published in the 2000s demonstrated that Psilocybe, as it was defined then, was polyphyletic. The studies supported the idea of dividing the genus into two clades, one consisting of the bluing, hallucinogenic species, and the other made of the non-bluing, non-hallucinogenic species. However, the generally accepted lectotype (a specimen later selected when the original author of a taxon name did not designate a type) of the genus as a whole was Psilocybe montana, a non-hallucinogenic species; if those forms of the species in the study were to be segregated, it would leave the hallucinogenic clade without a valid name. To resolve this taxonomical dilemma, it was proposed in 2005 to conserve the name Psilocybe, with P. semilanceata as the type, leaving the option to use Deconica as the name for the non-hallucinogenic clade. The proposal was accepted unanimously by the Nomenclature Committee for Fungi in 2009. Recently, it has been reported that the non-bluing Psilocybe fuscofulva does not produce hallucinogenic compounds. Thus, non-hallucinogenic species are also covered by the genus Psilocybe, not only Deconica.
Deconica had previously been recognized as a separate genus by several authors, including Rolf Singer in 1951, Dennis and Orton in 1960, and Horak in 1979.
Many species in Deconica were transferred there by mycologist Machiel Noordeloos in a 2009 publication.