"Smiting the table with his fist, he started up, and, with the most violent emphasis of rage and indignation, exclaimed, "Darn my heart and liver! 'tis a land lie, d'ye see; and I will maintain it to be a lie, from the sprit-sail yard to the mizen-top-sail haulyards! Blood and thunder!"
-- The Adventures of Peregrine Pickle by Tobias Smollett, 1751
'Blood and thunder' has been around for hundreds of year as an oath or swear. It is closely related to the ever popular bloody and bleeding of English vulgarism, although it is generally seen as being more mild. It is possible that thunder is a reference to the anger of God, although 'blood and thunder' is not generally seen as sacrilegious, even in the milquetoast manner of minced oaths such as zounds and gadzooks.
These days it is less likely to be used as an exclamation, and more likely to be found as an adjectival phrase, as in "he loves to read those blood-and-thunder stories". In this sense it is used to refer to an adventure story with lots of action and adventure. When it is being used as a adjective like this it should always be hyphenated.