I don't see why the Koran (quran, cough cough) should tell you something about terrorism. It is the Muslim's holy book, not the terrorist's holy book.
For my discussion, I simply used the Merriam-Webster dictionary[0]. It says "the systematic use of terror especially as a means of coercion". You are correct, their final objective is not to just scare people but to get something else. But I believe the immediate objective of the terror action is to scare people so to get to their final objective.