Cyberterrorism is a phrase used to describe acts of deliberate, large-scale disruption of computer networks, especially of personal computers attached to the Internet, by the means of tools such as computer viruses.
Cyberterrorism is a controversial term. Some authors choose a very narrow definition, relating to deployments, by known terrorist organizations, of disruption attacks against information systems for the primary purpose of creating alarm and panic. By this narrow definition, it is difficult to identify any instances of cyberterrorism. Cyberterrorism can also be defined much more generally, for example, as “The premeditated use of disruptive activities, or the threat thereof, against computers and/or networks, with the intention to cause harm or further social, ideological, religious, political or similar objectives. Or to intimidate any person in furtherance of such objectives.” This broad definition was created by Kevin G. Coleman of the Technolytics Institute. The term was coined by Barry C. Collin. Overview
As the Internet becomes more pervasive in all areas of human endeavor, individuals or groups can use the anonymity afforded by cyberspace to threaten citizens, specific groups (i.e. with membership based on ethnicity or belief), communities and entire countries, without the inherent threat of capture, injury, or death to the attacker that being physically present would bring.
As the Internet continues to expand, and computer systems continue to be assigned more responsibility while becoming more and more complex and interdependent, sabotage or terrorism via cyberspace may become a more serious threat. 
Cyberterrorism is the leveraging of a target's computers and information , particularly via the Internet, to cause physical, real-world harm or severe disruption of infrastructure.
Cyberterrorism is defined as “The premeditated use of disruptive activities, or the threat thereof, against computers and/or networks, with the intention to cause harm or further social, ideological, religious, political or similar objectives. Or to intimidate any person in furtherance of such objectives.” This definition was created by Kevin G. Coleman of the Technolytics Institute.
...subsumed over time to encompass such things as simply defacing a web site or server, or attacking non-critical systems, resulting in the term becoming less useful...
There are some that say cyberterrorism does not exist and is really a matter of hacking or information warfare. They disagree with labeling it terrorism because of the unlikelihood of the creation of fear, significant physical harm, or death in a population using electronic means, considering current attack and protective technologies.
The National Conference of State Legislatures (NCSL), a bipartisan organization of legislators and their staff created to help policymakers of all 50 states address vital issues such as those affecting the economy or homeland security by providing them with a forum for exchanging ideas, sharing research and obtaining technical assistance  defines cyberterrorism as follows:
the use of information technology by terrorist groups and individuals to further their agenda. This can include use of information technology to organize and execute attacks against networks, computer systems and telecommunications infrastructures, or for exchanging information or making threats electronically. Examples are hacking into computer systems, introducing viruses to vulnerable networks, web site defacing, Denial-of-service attacks, or terroristic threats made via electronic communication.  Demitri Jesus Olmo. 
Public interest in cyberterrorism began in the late 1980s. As the year 2000 approached, the fear and uncertainty about the millennium bug heightened and interest in potential cyberterrorist attacks also increased. However, although the millennium bug was by no means a...
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