Spiritual terror could be identified as extreme fear of perceived evil.
The fanaticism of a terrorist could be seen to be an effort to handle this extreme fear. This exaggerated reaction leads to drastic action and the endurance of the inevitable results.
Psychological / emotional perspective: Terror in a dream is often the result of unresolved fears and doubts. It is only by experiencing such a profoundly disturbing emotion that are we likely to make an attempt to confront those fears.
If someone else is terrified in our dream we are in a position to do something about it, and need to work out what course of action should be taken.
The appearance of a terrorist is a negative manifestation of our predisposition to be intensely emotional.
Material aspects: Fear or terror dreams can be one of the triggers towards a deeper understanding of oneself.
If we know we are fearful we can do something about it. Terror in dreams is more difficult to handle since in that state we will not know what the cause is and may well be paralysed by the feeling itself. When we are able to identify what prompts it in waking life, we can again take action to disperse it.