In Animal Farm, how does Orwell create a sense of panic and fear in chapter 7? What language does he use to show this?

In chapter seven of Animal Farm, Orwell is able to create a sense of panic and fear through his description of the pain of starvation and the terror of Napoleon.
The opening to chapter seven details how the difficult winter led to food shortages.  Orwell refers to the "dry frosty weather" and how the animals hand to endure "cruel work."  This toil was different than what they had experienced before because they did "not feel so hopeful about it as they had before."  At this point, the reality of Animal Farm is settling into the animals' psyche.  The post-revolution euphoria is gone as the animals were "always cold, and usually hungry as well."  With such a physical description, Orwell is able to establish the fearful mood that grips the animals.
This is enhanced with Napoleon's response to the food shortage.  Orwell describes how rations were reduced and further hardship was brought to bear on the animals so that the outside world would not realize how bad things were on the farm. Orwell describes how "starvation seemed to stare them in the face."  
Reminding us of how bad things are for the animals only sets up how much worse it is going to get.  Animals like the hens and the Minorca pullets who protest Napoleon's actions are dealt with severely and brutally. Napoleon orders all the animals to the courtyard in order to publicly address the rising tide of insurrection.  Orwell's language reflects the fear that the animals have as "They all cowered silently in their places, seeming to know in advance that some terrible thing was about to happen."
Fear turns into panic once the animals witness Napoleon's brutality.  Orwell describes how the dogs act on Napoleon's orders in dealing with "traitors." The dogs attack their victims as they are "squealing with pain and terror," and bring them to Napoleon's feet.  The animals stare in horror as the "dogs had tasted blood and for a few moments they appeared to go quite mad."  As different animals confess, "the dogs promptly tore their throats out."  Orwell conveys what the animals see in harsh detail: 

They were all slain on the spot. And so the tale of  confessions and executions went on, until there was a pile of corpses lying before Napoleon's feet and the air was heavy with the smell of  blood, which had been unknown there since the expulsion of Jones. 

After seeing all of this, the animals were "shaken and miserable," shocked by "the cruel retribution they had just witnessed."
In detailing Napoleon's cruelty, Orwell is able to create a sense of panic and fear.  Weakened by hunger and terrorized by Napoleon's brutality, the animals are besieged with negative thoughts.  They are a very long way from "Beasts of England."  The chapter closes with the hungry animals walking into an future filled with fear and doubt.