From the second edition (1989):
(ˈtɛrərɪz(ə)m) [a. F. terrorisme (1798 in Dict. Acad., Suppl.), f. L. terror dread, terror: see -ism.]

A system of terror.

1. Government by intimidation as directed and carried out by the party in power in France during the Revolution of 1789–94; the system of the ‘Terror’ (1793–4): see terror n. 4.

1795 Hist. in Ann. Reg. 112/2 It would‥renew the reign of terrorism. 1817 Lady Morgan France viii. (1818) II. 357 He was obliged to remain abroad during the whole reign of terrorism. 1861 Goldw. Smith Irish Hist. 85 Like‥the terrorism of the Jacobins‥it was a moral epidemic.

2. gen. A policy intended to strike with terror those against whom it is adopted; the employment of methods of intimidation; the fact of terrorizing or condition of being terrorized. Also transf. Cf. terrorist 1b.

1798 Mathias Purs. Lit. (ed. 7) 132 The causes of rebellion, insurrection,‥terrorism, massacres, and revolutionary murders. 1847 Grote Greece ii. xxx. IV. 155 He could not but be sensible that this system of terrorism was full of peril to himself. 1863 Fawcett Pol. Econ. ii. ix. (1876) 248 If anyone should disobey the decision of the meeting, he would subject himself‥to a social terrorism. 1936 W. H. S. Smith Let. 27 July in Young Man's Country (1977) ii. 19 The Constitutional League [of India], whose main purpose is to rouse public opinion against terrorism. 1957 L. Durrell Bitter Lemons 243 Though his complicity in EOKA was obvious, nevertheless he [sc. Makarios] was the only brake to terrorism and the only person who could curb it. 1958 B. Behan Borstal Boy III. 271 He said it was the fault of the British boss class that the Irish were forced always into terrorism to get their demands. 1963 Ann. Reg. 1962 236 The first half of the year was dominated by the difficulties of obtaining an Algerian settlement and, in particular, by the challenge to the authority of State presented by O.A.S. terrorism. 1973 Cape Times 27 Oct. 12 The Minister cannot expect journalists to do violence to the English language‥by describing guerilla warfare as terrorism at all times and in all circumstances. 1977 New Yorker 24 Oct. 35/1 Last week's manifestations of political terrorism were crowded off the front pages‥by more upbeat occurrences.