The story
Modern usage appears to originate with Jock Young in 1971 and Stanley Cohen in 1972. Cohen states that "[they] both probably picked it up from Marshall McLuhan's Understanding Media".
Etymology from Wiktionary, CC BY-SA 4.0.
moral panic
Today it means: A semi-spontaneous or media-generated mass movement based on the perception that an individual, group, community, or culture is dangerously deviant and poses a menace to society; a public outcry. Full definition →