to extract RelatedTerms first you have to extract top Term element using btree.select('Terms > Term') now you can loop it and extract Term inside RelatedTerms using term.select('RelatedTerms > Term')

import json
from bs4 import BeautifulSoup

xml_file = './xml.xml'
btree = BeautifulSoup(open(xml_file, 'r'), "xml")
Terms = btree.select('Terms > Term')
jsonObj = {"thesaurus": []}

for term in Terms:
    termDetail = {
        "Description": term.find('Description').text,
        "Title": term.find('Title').text
    }
    RelatedTerms = term.select('RelatedTerms > Term')
    if RelatedTerms:
        termDetail["RelatedTerms"] = []
        for rterm in RelatedTerms:
            termDetail["RelatedTerms"].append({
                "Title": rterm.find('Title').text,
                "Relationship": rterm.find('Relationship').text
            })
    jsonObj["thesaurus"].append(termDetail)

print json.dumps(jsonObj, indent=4)

xmltodict (full disclosure: I wrote it) can help you convert your XML to a dict+list+string structure, following this "standard". It is Expat-based, so it's very fast and doesn't need to load the whole XML tree in memory.

Once you have that data structure, you can serialize it to JSON:

import xmltodict, json

o = xmltodict.parse('<e> <a>text</a> <a>text</a> </e>')
json.dumps(o) # '{"e": {"a": ["text", "text"]}}'

I would recommend to use XSLT to transform the XML to JSON:

import json

from lxml import etree

XSL = '''<xsl:stylesheet version="1.0" xmlns:xsl="http://www.w3.org/1999/XSL/Transform" xmlns:fo="http://www.w3.org/1999/XSL/Format">
    <xsl:output method="text"/>

    <xsl:template match="/collection">
        <xsl:text>{</xsl:text>
            <xsl:apply-templates/>
        <xsl:text>}</xsl:text>
    </xsl:template>

    <xsl:template match="genre">
        <xsl:text>"</xsl:text>
            <xsl:value-of select="@category"/>
        <xsl:text>": [</xsl:text>
        <xsl:for-each select="descendant::movie" >
            <xsl:text>"</xsl:text>
                <xsl:value-of select="@title"/>
            <xsl:text>"</xsl:text>
            <xsl:if test="position() != last()">
                <xsl:text>, </xsl:text>
            </xsl:if>
        </xsl:for-each>
        <xsl:text>]</xsl:text>
        <xsl:if test="following-sibling::*">
            <xsl:text>,
</xsl:text>
        </xsl:if>
    </xsl:template>

    <xsl:template match="text()"/>
</xsl:stylesheet>'''

# load input
dom = etree.parse('movies.xml')
# load XSLT
transform = etree.XSLT(etree.fromstring(XSL))

# apply XSLT on loaded dom
json_text = str(transform(dom))

# json_text contains the data converted to JSON format.
# you can use it with the JSON API. Example:
data = json.loads(json_text)
print(data)

Output:

{'Action': ['Indiana Jones: The raiders of the lost Ark', 'THE KARATE KID', 'Back 2 the Future', 'X-Men', 'Batman Returns', 'Reservoir Dogs'], 'Thriller': ['ALIEN', "Ferris Bueller's Day Off", 'American Psycho']}

I don't understand what you want to achieve with "second output" and "third output", though, as these outputs seem to be constants.

xmltodict (full disclosure: I wrote it) can help you convert your XML to a dict+list+string structure, following this "standard". It is Expat-based, so it's very fast and doesn't need to load the whole XML tree in memory.

Once you have that data structure, you can serialize it to JSON:

import xmltodict, json

o = xmltodict.parse('<e> <a>text</a> <a>text</a> </e>')
json.dumps(o) # '{"e": {"a": ["text", "text"]}}'