Panic is the most common and the most important psychological effect. Battles are often won or lost because an army panics and flees, even though it may not have been beaten in combat. Troops who see their friends run can easily lose their nerve and flee themselves, causing other troops to lose heart until soon the whole army is fleeing in blind panic.
A unit must take a Panic test in the following circumstances:
1. Fleeing Unit within 4" at the Start of the Turn
A unit must test at the start of its turn if there is one or more units of fleeing friends within 4". However, the unit does not have to test if it outnumbers the fleeing unit (or if it outnumbers the fleeing units combined if there are two or more within 4"). Such a unit takes heart from its numbers and is not therefore panicked by its fleeing friends.
For example, a fleeing unit of 10 models is ignored by a unit of 11 or more, a fleeing unit of 14 is ignored by units of 15 or more, and so on. Note that it is the size of the fleeing unit's which is important - not the number of individual models within 4".
2. Friends Break from Hand-to-hand Combat within 12"
Test during the hand-to-hand combat phase if one or more friendly units break within 12" as a result of being defeated in hand-to-hand combat. In order to avoid confusion between units which are fleeing from combat and units which are fleeing as a result of panic, work out all combat results first, and then take all resultant Panic tests. A unit only needs to take one Panic test on account of breaking friends in each hand-to-hand combat phase, regardless of how many units of friends break within 12".
The same test must also be taken if a friendly unit within 12" is destroyed in hand-to-hand combat, unless it is a unit of one model with less than 5 wounds on its original profile, in which case no test is necessary. Although a unit which is destroyed cannot be broken as it no longer exits, its destruction is still extremely unnerving for friends nearby!
3. Charged in the Side or Rear while Engaged in Combat
A unit must test if it is fighting in hand-to-hand combat and is charged in the side or rear by an enemy unit of five models or more. Make the test as soon as the charge is declared and determined to be in reach.
No test is required if the charging unit is unable to reach its target unit. Also, no test is required if the charging unit amounts to fewer than five models.
4. Fleeing Friends Destroyed by Chargers within 4"
If a friendly unit flees from a charge and is caught and destroyed, then all friendly units within 4' of the final position of the fleeing troops must take a Panic test once all charges are complete but before hand-to-hand fighting starts.
No test is required for a unit that outnumbers its destroyed friends, in the same way as described for '1' above.
5. General Slain
If your army's general is killed then every unit in your army must take an immediate Panic test. With your leader dead rumour of defeat spreads across the battle front like wildfire! This is often the moment when battles are won and lost.
6. 25% Casualties from Shooting or Magic
A unit must take a Panic test if it suffers 25% of its number as casualties in the enemy's shooting phase, or 25% of its number as casualties in the enemy's magic phase. Only one test is required in any phase - if this is passed then any subsequent casualties are weathered without qualm.
For example, a unit of 12 models must test if it suffers 3 or more casualties from enemy shooting.
This test must also be taken by a charging unit if its enemies stand and fire and inflict 25% casualties. This may result in the charging unit panicking before it contacts its target, in which case it has forced to flee from the hail of arrows unleashed by the defenders!
This test must also be taken if the unit suffers 25% casualties from randomly moving enemies, magical effects or unusual terrain types as might be included as 'special rules' by the players. This is intended as a 'catch- all' rule to cover units which suffer high casualties from something other than normal hand-to-hand fighting, shooting or magic. A good example is casualties inflicted by a crashing gyrocopter, by whirling Goblin fanatics, or by Squig hoppers or Steam Tanks, the last two of which both cause casualties as they move.