The most common and most likely answer to this crossword clue is the 9 letter word TERRORISE
I've seen this crossword clue in The Sunday Telegraph
T
E
R
R
O
R
I
S
E
More clues leading to the result TERRORISE
- King with gold I sheltered in brief scare
- Mistake concealed by building site bully
- Drunken roisterer to frighten people badly
- What may come from that error is expected to create panic
- Bully‘s mistake — wearing crooked ties
- Fault is in the oddly-designed alarm
- Intimidate one after blunder in constructing set
- Blunder, cutting wrong ties in alarm
Buddy explains!

The straight part
We know that "to create panic" is the straight/definition part of the clue. The straight part is often a synonym or definition, in this case to create panic = terrorise.The cryptic/wordplay part
In cryptic crossword there's often an wordplay/cryptic part as well.This part involves a more complex hint, such as an anagram, homophone, hidden word, etc.
Sadly, We don't have an explanation for this specific crossword clue yet.
What does TERRORISE mean?
TERRORISE verb- To inflict someone with terror; to terrify.
- To coerce (someone) by using threats or violence.