Parapsychology is a branch of investigation which attempts to utilize scientific methodology to prove or disprove paranormal phenomenon.
In the strictest sense of the word, yes, it is science:
Science: (per american heritage dictionary)
1. a) The observation, identification, description, experimental investigation, and theoretical explanation of phenomena.
b) Such activities restricted to a class of natural phenomena.
c) Such activities applied to an object of inquiry or study.
d) Methodological activity, discipline, or study: I've got packing a suitcase down to a science.
2. An activity that appears to require study and method: the science of purchasing.
3. Knowledge, especially that gained through experience.
Keep in mind that a few hundred years ago, the concept of bacteria would have been laughed at by the scientific community in preference to the concept of "humors".
The heart of science is in expanding perceptions and explanations for phenomenon, not limiting them.