The discovery of terma has always been controversial. There have always been suspicions that many, most, or all termas are fake. The need for a method of validating them is recognized. An authoritative work on terma is the Third Dodrupchen Rinpoche’s Wonder Ocean. Tulku Thondup Rinpoche’s book [citeamazon 086171122X|Hidden Teachings of Tibet] contains a full translation of this book, together with commentary. Below, I quote the sections on terma validation, pages 92 and 157-160.
If you are a Buddha, it is simple to decide whether a terma is valid. A terma is an explanation of the enlightened and unenlightened states. A Buddha can compare these descriptions with his or her own experience to see whether they are accurate.
If you are not a Buddha, there are two ways to evaluate a supposed terma. The first is that a god can appear in a vision and tell you the answer. Unfortunately, “nowadays, however, it is rare for someone to have the capacity” to have such visions. Also, demons can send deceptive visions, and only a Buddha can know for sure whether a vision comes from a god or demon.
Alternatively, one can “examine by means of proofs from scripture and reasoning.” But “it is difficult for no error to be made in an examination just by people who regard themselves as scholars.” To quote Padmasambhava himself, “in the future, sophists, verbally skilled, anchorites and others who are biased, inflated with prejudice, will promote themselves and dispute my treasures.”
both of these methods are of little help
Tulku Thondup Rinpoche concludes: “both of these methods are of little help.”
In short, if you are not a Buddha, there is no reliable way, according to Nyingma theory, to determine whether a terma is valid. To say “I know for sure that terma X is valid” (or invalid) is to say “I am a fully-enlightened Buddha.”
This is disappointing. Certainty is unavailable. Later, I will suggest ways we can learn to live with uncertainty about terma.
Wonder Ocean mentions one method by which a terma should definitely never be evaluated. “One cannot judge tertons as inauthentic because of their imperfect and mercurial character, even to the slightest extent. . . . Among the false tertons there are many who are harmonious with people, who seem to have disciplined conduct, and are fortunate and charismatic. At the same time, among the authentic tertons there are many who are loose in speech and behavior and who, without the least hesitation, get involved in many activities that people will condemn.”