"sudden mass terror," especially an exaggerated fright affecting a number of persons without visible cause or inspired by trifling cause or danger, 1708, from an earlier adjective (c. 1600, modifying fear, terror, etc.), from French panique (15c.), from Greek panikon, literally "pertaining to Pan," the god of woods and fields, who was the source of mysterious sounds that caused contagious, groundless fear in herds and crowds, or in people in lonely spots. In the sense of "panic, fright" the Greek word is short for panikon deima "panic fright," from neuter of Panikos "of Pan."
The meaning "widespread apprehension in a trading community about financial matters" is recorded by 1757. Panic-stricken is attested from 1804. Panic attack attested by 1970. Panic button in a figurative sense is by 1948 in the jargon of jet pilots; the literal sense is by 1965 in reference to prison security.
And if he gets in a tight spot and doesn't know what to do, he "pushes the panic button for two minutes of disorganized confusion." During his first few weeks he may even find the panic button "stuck in the on position." ["How Jet Jockeys Are Made," "Popular Science," December 1948]