The default mode for the psql script tool is to continue processing when it finds an error. This sounds dumb, but it exists for historical compatibility only. There are some easy—and mostly permanent—ways to avoid this, so let's look at them.
Let's start with a simple script, with a command we know will fail:
$ $EDITOR test.sql mistake1; mistake2; mistake3;
Execute the following script using psql to see what the results look like:
$ psql -f test.sql psql:test.sql:1: ERROR: syntax error at or near "mistake1" LINE 1: mistake1; ^ psql:test.sql:2: ERROR: syntax error at or near "mistake2" LINE 1: mistake2; ^ psql:test.sql:3: ERROR: syntax error at or near "mistake3" LINE 1: mistake3; ...