Ok, kiddo, imagine that you have a big brother who always scares you by saying things like "if you don't do what I say, a monster will come and eat you". That's what we call in terrorem.
In the adult world, in terrorem means doing things to scare people so they do what you want them to do. For example, if a lawyer puts a clause in a will that says "if you try to change anything in this will, you will lose all your inheritance", that's also in terrorem.
But don't worry, grown-ups don't use in terrorem to scare you like big brothers do. It's usually used in legal and financial situations to make sure people follow the rules.