The Collaborative International Dictionary of English v.0.48:

Terrorism \Ter"ror*ism\, n. [Cf. F. terrorisme.]
   1. The act of terrorizing, or state of being terrorized; a
      mode of government by terror or intimidation. --Jefferson.
      [1913 Webster]

   2. The practise of coercing governments to accede to
      political demands by committing violence on civilian
      targets; any similar use of violence to achieve goals.
      [PJC]

WordNet (r) 3.0 (2006):

terrorism
    n 1: the calculated use of violence (or the threat of violence)
         against civilians in order to attain goals that are
         political or religious or ideological in nature; this is
         done through intimidation or coercion or instilling fear
         [syn: terrorism, act of terrorism, terrorist act]