Anyone can be good and anyone can be evil.........
also, sometimes the villains are the highlight of the story 
Just make sure to give them a solid characterization outside their gender. Being trans is not a personality trait.
Going to echo what others have said here because it's important: Your villain and your other bad guys can be anything without reasonable backlash, so long as the disagreeable things they're doing is not related to what they are, such as their skin color, their orientation, their culture or nationality, etc.
However, I've seen arguments from those who feel because a certain group gets so little representation to begin with, you must know that characters who are represented by said group hit much harder when they're villains, or poorly-handled.
If you have 1000 characters, and 10% of them are bad apples, or villains, that means 100 are bad. But a whopping 900 can be looked up to and accepted in the conventional way. This would be the majority who seem to be represented 99% of the time.
But if you 10% bad apples in a pool of 100 characters, that means 10 of them are bad, and only 90 will generally be beloved and looked up to, and feel representative of some groups.
This is the same issue that is encountered during the "kill your LGBTQs" trope. If a story only has 2 LGBTQ characters, if 1 is bad, 50% of the LGBTQ characters are bad in the story. Mathematically, it just doesn't look good. 
I always felt it was a valid concern. It's difficult not to notice and sticks out like a sore thumb to me when I see it, but that's not to say I always have a problem with it. I don't think writers should have to be representative. It's up to consumers to decide if they want to bother consuming the story, and they can have whatever stipulations they want to explain why they didn't continue to consume, but there should be no demand of a writer on an individual level to adhere to demands for representation.
Even if it's done right right though, you can still get what I'd say is unreasonable backlash. As an example, the writer who made Crazy Rich Asians was writing about his actual experience. Despite not indicating that "only asians are like this when they're rich", it still got backlash because several asians were shown in a bad light, even though no one said it was asian-specific (far as I know. I can see why some people would see it that way though since it's called Crazy Rich Asians and not Crazy Rich People).
As long as they're not characterized as the "evil trans villain who does trans things and is a true horror because they are trans!!" then I think you're fine. If it's a matter of fact that they're trans, then the character is what they are. Just don't throw it in the reader's face every time they do something villainous.
You would certainly not be the first to write a villain who belongs to the LGBTQ+ community. Kagato from Tenchi Muyo comes to mind, who is a hermaphrodite.
I believe you can have a trans villain or any kind of villain in general but that what they are or the reasons of their evil acts aren't only about they are X.
A lot of times villains are depicted as the "bad guys" but there are many times readers just love them, because the reason they are villains is actually a valid reason, because they are charismatic, funny, well developed, well constructed and with interesting personalities or history. Like several of the villains in Supernatural (Crowley, the King of Hell is a queer character but despite of him being a demon and most of the time an enemy of the protagonists, that doesn't stop people from loving him dearly)
What you must know is that, you don't need to shove right at people's faces that X character is Y. The louder you're about that the more superficial the character ends up being, and that's something that happens with several comics and series nowadays. Media focus so much to tell possible readers and the public that said character is X so that makes them cool but then there isn't much about their personality or abilities that at the end, despite there is lot of "diversity", there isn't actual representation.
No? Anyone can be evil. I've known both wonderful and sociopathic people that were trans. Just don't make them a stereotype and give them a personality that doesn't revolve around them being transgender.
The three main things to avoid would be:
There's only one trans person in the story and it's the villain. Even if it's not the statement you're trying to make, the outcome will inevitably be the contrast of the bad trans person and the good and noble cishets fighting them. We know logically that there are all kinds of people in the world, but when it comes to fiction, the only things that exist in your story are the things you put in there, so if there are no good trans people, only an evil trans person, it feels like the intended statement is "trans people = bad". It's a bit like how there are so many queer coded villains in classic Disney films, particularly effeminate male characters like Scar, and they are contrasted against the "wholesome" manliness and conformity of the heroes. I'm not trans, but I am gay and it gets pretty tiresome when the only characters like me are evil.
Oh, but if you do have more than one trans person in your story, be sure to avoid the trope where the bad villain trans person is either a big trans woman who doesn't "pass" well but is constantly seeking sexual attention or a scheming nonbinary trickster (who may be a shapeshifter or disguise artist), while the good trans character is a perfect shy cinnamon roll who is either a very skinny feminine transwoman who passes 100% perfectly or a cute little trans boy or AFaB nonbinary with a pixie cut hairstyle who looks like a Victorian chimney sweep. This is pretty overdone and ties into a lot of stereotypes about "good trans" and "bad trans" people in real life.Their queerness is fetishised as wicked decadence or unnatural breaking of "the laws of nature". A lot like the villain of the original Ace Ventura Pet Detective movie, whose intersex and trans nature is played as disgusting and sickening, and the character is portrayed as a seductive trickster, or of course the villain of Silence of the Lambs, who is shown as a creepy pervert, there's been a long history of the trans villain who is AMaB (Assigned male at birth) and "disguises" as female to prey on vulnerable women. It's a super-awful trope that gets used by TERFs out in the real world to attack trans rights.
Similarly if you spend too much time focusing in on showing the character as big, muscular, hairy etc. or how much time she spends on makeup or getting dressed, or focusing a lot on a "bulge" under feminine clothing, lingering on how that contrasts the cis bodies, it could easily slide problematic, especially when the character is a villain and the creator is cis.The trans villain is motivated by stuff related to them being trans. Sorry, because this might be why you want to make your villain trans... but a cis person really has no business writing a story about how the experience of being trans and the struggles trans people face would cause them to do bad things. I'm a cis lesbian with a nonbinary partner and I wouldn't touch that with a 10' pole. Their motivation should not be any of: "I am angry that people are not attracted to me like they are to cis women." or "I fetishise female bodies so I kill/mutilate women and also I would like to have a female body myself for sexy reasons" or "Society does not respect my need to be acknowledged as a woman and so I am going to blow up the White House!/ Usurp the government and become queen!" These are stories to be told by a trans person if at all.
tl; dr: Have multiple trans people in your story and have the villain being trans just be a characteristic they happen to have that isn't particularly tied to their villainy. If in doubt, talk to some trans people and read stories written by them.
28 days later
keep this open though, I'm still wondering what is "controversial to some" means. No offence to the topic author. I myself have a trans villain with sad ending. Some dislike it, but the person who inspire the character, who is a trans herself, really love it. So the story is for my friend who loves it, not for strangers who call me transhobia for making a trans villain.
She love the character because the character is the empress and I draw her super beautiful.
The story is about her struggle in her womanhood and self-acceptance of her disability.
And yes, I did the big taboo mentioned by some replies above.
Her route to tyranny is basically due to her being a transwoman.
And my avatar is the character I'm talking about.
It's a novel by the way.
The only reason I say it’s controversial to some is that some people are strong believers that trans characters or LGBT+ characters should not be represented as bad since they already get very little representation. I have seen people be called transphobic/homophobic/bigoted for having a differing opinion in person. I guess you can see it as me trying to not be problematic(?)
Well, a good character should not be a Mary Sue.
A villain can be lovable sometimes.
It is evil representation but pure evil is different I guess.
If they were represented for evil without a reason, then probably is bad.
But a reason to be evil could sometimes be a good drama.
Even though the reason be that person being a trans.
Spoiler:
She became evil bcoz her spouse is looking for other woman to have babies.
Since she's trans, and unable to bare one, she tries to kill the other woman.
This in reference to Hera (peacock is a male bird) in Greek myth.
In the end, she was given a womb and mentally tortured by the other villain.
Then, got eaten alive.
My friend (who is the muse of it) love the part of the torture and counter to be frank.
the mental torture:
“Fertility is essential to build a nation! How could an empress be infertile!”
the counter:
“We are human! We are not bees!”
“A nation is built by people! Not the empress alone!”
I have definitely seen unreasonable reactions to trans characters. As a nonbinary person, I've had to think seriously about whether to represent elements of my own identity that might get me called transphobic, but your phrasing seems very dismissive of people who might be upset. Even though you ask if it's good, you also talk about "people getting called bigoted for having a different opinion", which makes it sound like your focus is a bit more on how you want to be seen than how you want trans readers to feel. Don't think about "is it transphobic". There's no objective answer to that, and us trans people aren't a hivemind. Instead think "how might this make trans people feel, and am I willing to accept the consequences for the people this might hurt".
For some personal examples on both decisions
Summary
I identify as both nonbinary and lesbian. Some people find this confusing and contradictory, offensive to trans people, or offensive to lesbians. I can explain why the term makes sense for my experience, but that doesn't mean readers will feel the same way. When I chose to make the lead of Left to Rot a nonbinary lesbian, I was really worried about the response, but I decided not portraying an identity, especially one I shared, because I was afraid of backlash, was cowardly. I didn't actually feel I was telling a hurtful story, I just didn't want mean comments.
On the other hand, I like skeevy characters, and I'm gay. If I'm writing something the world will never see, I'm happy to fill it up with skeevy lesbians. But there is a long, nasty history of The Predatory Lesbian in media, so I don't write that for public stories. It's not just about getting 'Called Out', it's about
A) Knowing I could really hurt lesbian readers, or validate the worldview of homophobic readers
B) I would no longer be telling the story I wanted to tell. Being a writer means knowing connotations. Readers know what a stormy night means and what a pair of doves mean. If I key into that trope, readers would not see the story I was trying to tell.
There are bad faith readers, but LGBT+ opinions are very rarely "you can never write a flawed LGBT+ person". It is specifically that LGBT people, especially trans people, have a long history of being seen as dangerous, predatory, and immoral, and cast in villain roles. Even as we've moved past some attitudes, there can be a tendency to push characters towards that role. (Think of all the scary male villains with effeminate gestures, or who creep on the male lead) Because of that there's two things that can be very important
- Do the research. Learn what tropes are hurtful and why.
- Show LGBT people in other roles. You can say the character's villiany and trans-ness are totally unrelated, but it still means the only trans person in your story is a villain.
On the flipside, if you're only thinking about Doing It Right, it can be easy to flip the other direction and be so afraid of Doing Representation Wrong you either close down and only write what feels 'safe' or end up with something totally toothless where only white, cis, straight men are written as complex, interesting people because the author is so worried about doing it wrong.
This isn't the main take in the thread, and sounds a bit harsh, but I'd say maybe wait a bit on writing a trans villain. I don't think it's something you can never do, but the fact that you're asking "are trans villains bad, I don't want to get called out" rather than "why do trans villains upset people, and what do you think is important to understand before writing a trans villain" makes me think you should give it some time.
One more thing. If the character's villainy is unrelated to their trans-ness, as most people in this thread advise, why have you chosen this character to be trans? Did you consider making the hero trans?
There are plenty of answers to this that are totally valid reasons to make a character trans, but sitting with questions like this can really help you either see bad patterns in your writing or force you to articulate why it's important to the story you want to tell.
I don’t think I came off the right way here when I replied. I don’t mean to say I’m only asking this for the sake of looking better but rather I wish to understand what would be the best course of action. It’s still a story that is very much under development. But I feel like I should be open with my decision.
Why is she trans?
It wasn’t really like I planned on making her like that until I accidentally drew her VERY masculine for her first design. And by masculine, I mean by my artsyle’s standards. But I really enjoyed it. I was originally just going to make her a cross dresser but realized that a lot of my male characters are just cross dressers. Not trans. So I went “well I mean, I’m a queer person, a lot of my characters are queer, so where’s the harm in making a trans person!” This was before I even made her an antagonist. Before she was a good guy, who was friends with the villain character who welcomed her when everyone else from her past didn’t (in the story she’s open and accepted [They're a progressive generation]) and decided to turn against said villain when she starts doing bad stuff!
But wait. “That doesn’t make sense.” I had thought to myself. If I was in her shoes, I would’ve stayed with the villain. The villain would have been the first person to accept me and get others to accept me too. Why would I turn against her once something bad happened? That feels selfish.
So that’s when I decided, she would follow along with the villain’s plans but know what shes doing is wrong. I made her less boring. I made her self aware. (Also the villain is indeed a manipulative POS. She gets like 5 people on her side just by being nice)
And that’s how she became who she is now. She’s not evil or anything like that. I just made her… how to describe it?
I don’t know. But I just wanted to make that a little clearer.
This is how I feel a lot when I try to talk to people about fixing issues in their story with toxic/harmful tropes with their trans characters. They seem more interested in me giving a stamp of approval for their crappy character instead of listening to me about what they are doing wrong. They act like trans people are just "too sensitive" yet they also want a pat on the back for their trans representation in their story. I just find it frustrating and exhausting. Because I feel like I am arguing for my right to exist with someone who isn't trans.
This is when eliseswarren made a good point here!
To give a realistic example, there is a transwoman in the mandarin classical novel by JinYong.
Her name is "Invincible East" who is in the novel, an evil villain hated by my transwomen friends.
But when she was adapted on movie, by the actress Brigitte Lin, she completely adores this evil villain!
Here's the difference. The original novel is depicting that there is an evil force of some forbidden knowledge that causes a strong man to lost his own mind and turn himself into a woman. So there's a problem, he wrote about transgender as a form of consequences of some evil power. And the transition is not consensual.
But in the movie, the man himself is the one who decides to turn himself into a woman in order to obtain that power. So there's a dynamic difference here. She's in favor of the movie for the character because that's express how my trans friend feels. When she decided to become a woman, she is fully aware and know what is she doing.
How trans feel about the character is the key! Is the story empowering her? For what I know, a transwoman does not wish to be depicted as a weak and all feminine perfect girl next door. She hates The Danish Girl. Some of her fav is Beautiful Boxer. She wants to see movies and literature to show trans as a confident living person who is as usual as any other person. Either being a protagonist or an antagonist.
And oh boy! Everyone loves Brigitte Lin's "Invincible East" despite the original author was unhappy about it. So far is the one successful trans villain that I know of.
Mkay, I'm gonna chime in, as a nonbinary person.
First off: trans woman is two separate words. I.e., a woman who is trans. You don't see us calling white women whitewomen or whatever, do you? Yeah, just something I thought I'd put out there.
Second of all: I feel like if a villain in a minority is done respectfully, as well as not the only representation that minority has in that canon, it can be pulled off.
I will say, it sounds like you're kinda thinking of giving her a redemption arc? Or at least that she's going to be highlighted as another victim of the antagonist. That could help.
And of course, don't be offensive. Don't make her a stereotype--i.e., super sexualized, excessively masculine looking, etc. Look into transmisogynistic stereotypes, maybe consider a sensitivity reader.
Just some tips from a local trans person, haha.
I know readers are mostly open-minded. I have a fantastic group of readers and I just enjoy interacting with them.
However, it should be noted that a few might take offense even if there is nothing to be offended about. Here's how you know you have created a fantastic villain:
1) They have motivations. Try to explain why they are the villain. It should also be noted that sometimes, we give the term "villain" to someone who opposes the protagonist. So why are they the opposition force? What makes them stand against the values that the protagonist holds?
2) Introduce other trans characters. If you world can have a type of character, it can have other similar types of characters. But of course, unless there is a justifiable rule why there has to be only one of the character.
3) Think about an arc for them. It does not matter whether the villain has to die, but there should be a good reason why.
4) They need to oppose the protagonist's values. This is a great way to establish a connection between the MC and the villain. That way, the villain does not feel like they are just a random character out to do villain things. Think about Batman and Joker. Superman and General Zod. In fact, you can find one of the most fantastic "villains" in Death Note in the form of Light Yagami. And yes, he is the villain of the story, but he is so well written that we can't help but kind of, in a weird way, root for him.
Apart from that, don't make the character a truly despicable person for the sake of doing it. Try to give them a personality. Some of the best villains are those that we can, to a certain degree, understand and sympathize with.
As many people in this thread have said, their opinion is that of a single individual, and not representative of the community as a whole. And I think that sentiment is more applicable here than most might think. Your characters are individuals, and their individual actions represent them, not any sort of community as a whole. I think it would be incredibly unfair to place the burden of representing an entire demographic on the shoulders of a single character in any circumstances.
Sometimes people fit stereotypes, sometimes they don't, and sometimes they straddle the line.
In the same way it would be racist to meet a single black person on the street and then assume every single black person thinks and acts like them, I think it's pretty reductive and harmful (not to mention presumptuous) to read a story about a trans character and think that's what the author believes about every single trans person. It's what they think about this trans person in this set of circumstances.
I've met a LOT of gay men who fall very neatly into the limp-wristed 'yas queeeeen' beyonce-is-my-spirit-animal stereotype, and they are proud of that. For them, it's a way to express that part of their identity with pride. A way to let the world know that they are who they are and they refuse to be ashamed of it.
Some other gay men I've known, however, are off-put by this: they view it as reinforcing those harmful stereotypes and making it harder for them to be viewed as anything else. They just want to be normal-ass dudes who happen to be into dudes without having to prance around in short-shorts and wear rainbow-patterned everything just to prove it.
You know what those two groups of people have in common? That's just one part of their identity. I've known some who were deeply spiritual, others who were staunch anti-theists. Some were into dance, others were into cooking, and yet others were into video games. Some were quiet and shy, others were loud and boisterous.
As much as the term 'snowflake' has lost its meaning due to how often it gets thrown around on the internet today, it's an apt descriptor: we humans all have similarities to one another in our basic structure and desires and needs, both emotionally and physically, but no two are alike. Each person, every last one of them, is an individual, just as capable of being kind or cruel, heroic or villainous, as any other.
I recognize that many people would argue that because trans people have such sparse representation (as with many other demographics), they should therefore not be cast in a role the audience is wont to dislike: you make a white man a villain and he is but one of hundreds of thousands of white men represented in media, thus he doesn't tip the scale very far in any direction. Meanwhile, if a trans woman is the villain, she is only one of a few dozen instances of such representation, and therefore has a far greater 'weight' simply by virtue of existing.
That, I would say, is the very definition of tokenism: including a character in such a way that they meet certain requirements, to fill a certain quota, or to fulfill some need beyond 'making the story more interesting'.
Representing all sorts of people in all sorts of lights is what we should be striving for: Some human beings are bad people, and all trans people are human beings. Ergo, some trans people are also bad people.
I think GRRM puts it best when he's asked about his female characters:
No matter what their identity may be. Some people are good, some people are bad, all are fallible, and all are human beings, same as the rest of us.
"Technically," sure, but that doesn't mean that one of them is seen as outdated and offensive in many circles.
Case in point: https://www.vox.com/2015/2/18/8055691/transgender-transgendered-tnr4
Um, nothing says outdated like a Vox article written by a cisman in 2015.
I am a transman and I never found it offensive. I have interacted with many transpeople and they never mentioned that they found it offensive. Even when I looked up recent Twitter posts, people were OK with using it.
No, it isn't.
Evil is evil and everyone is capable of being evil regardless who you are. It doesn't discriminate. It doesn't care.
In the end, it is your story and if you're going to make a transperson and the villain, there shouldn't by anybody stopping you. Humans have different facets about us and that's what makes us interesting.
So, I don't think you're doing anything wrong.