Slip and panic, cutting head (5)
I believe the answer is:
error
'slip' is the definition.
(slip can mean an error or mistake)
'panic cutting head' is the wordplay.
'panic' becomes 'terror' (synonyms).
'cutting head' means to remove the first letter.
'terror' with its initial letter taken off is 'ERROR'.
'and' acts as a link.
(Other definitions for error that I've seen before include "Blunder, slip" , "Mistake from terrorist" , "Miscarriage of justice" , "Howler" , "wrongdoing" .)