Pichu in depth
A squeak turned into a name
ピチュー is pure onomatopoeia: it reproduces the sound of a small spark, just as the Japanese «chu» reproduces a mouse’s squeak. Pikachu adds that «chu» to the «pika» of crackling electricity; Pichu keeps the shorter part, the sound made by a creature that cannot yet produce the larger flash. The name did not change when it was brought into English or Spanish, which is unusual for Generation II.
The design is a shrunken, softened Pikachu: pale-yellow fur, ear tips, collar, and tail in black with hard angles, and pink cheek pouches where it stores its charge. Storing it is precisely what it does not know how to do, and everything else follows from that.
The baby that arrived with the Eggs
Pokémon Gold and Silver introduced breeding and, with it, a handful of baby forms for species that already existed. Pichu is Pikachu’s, and its arrival raised an awkward question that still stands: breeding one does not produce a better Pikachu. The resulting stats are the same as those of one caught in the wild, and the process costs levels and steps. The only solid reason to go through the Egg is the moves that can only be inherited, starting with Volt Tackle.
The rest of that batch of baby Pokémon shares the same problem. Elekid at least has 65 Speed and hits harder; Pichu is left with 205 total points and 15 Defense, which in practice means it cannot take a hit at all. Its compensation is of a different kind: it learns Sweet Kiss at 8 and Charm at 20, two status moves that frustrate the opposing AI at low levels far more than any of its attacks.
The one with the spike on its ear
In Pokémon HeartGold and Pokémon SoulSilver there is a different Pichu, with its left ear split and bent. To obtain it, you needed a Pikachu-colored Pichu distributed in an event; Professor Elm explains that it travelled through time alongside Celebi, which is why it cannot evolve. It cannot leave those two games either: trading is blocked. It is one of the few times the game uses an aesthetic variant to tell something specific about the character instead of to sell a figure.
Outside the main series, its most memorable appearance is Super Smash Bros. Melee, where its Electric attacks damage it as well. The joke is to bring to the controller what the Pokédex entries had been saying since 1999: it does not control what it generates, and it is the first one to suffer for it.
What to do with one
If it appears on your team, the sensible route is short. Give it an item that raises friendship, put it in for one turn of every battle, and switch it out before it gets hit; with Nasty Plot at 16 and Play Nice at 4, it can just about last long enough to reach the next level. As soon as its friendship goes above 220, it evolves and the problem disappears. The rest of its TM repertoire—Substitute, Volt Switch, Protect, Rest—is meant for the Pikachu that comes afterwards, not for Pichu.